Berkshire Hathaway tops $1 trillion market cap for first time as Buffett accelerates BofA stock sales

Warren Buffett’s Berkshire Hathaway (BRK-A, BRK-B) surpassed a market cap of $1 trillion for the first time on Wednesday as it continues to sell some holdings in Bank of America (BAC).

Berkshire is the first outside the tech world to reach that exclusive territory in the US, which currently includes just six other companies.

The move comes after Berkshire disclosed late Tuesday that it had trimmed its stake in the nation’s second-largest lender by another 24.6 million shares, generating $982 million.

Berkshire has sold BofA stock in five of the past six weeks starting in mid-July, unloading a total of 129 million shares and earning $5.4 billion on those sales.

Bank of America’s stock has fallen by more than 9% during Buffett’s selling spree. It is still up roughly 18% so far this year, trailing larger gains by rivals Goldman Sachs (GS), JPMorgan Chase (JPM), and Citigroup (C).

BofA’s stock was up more than 1% in Wednesday morning trading.

Berkshire has not yet said anything about the motivation for selling some of its Bank of America stock. And it remains the bank’s largest stockholder, with over 900 million shares worth more than $35 billion.

The recent moves are notable because of Buffett’s long history with the bank. He injected $5 billion into Bank of America in 2011 as the lender struggled to overcome the wreckage of the subprime housing meltdown that caused the 2008-2009 financial crisis.

It wasn’t solely a bet on Bank of America’s recovery but also on the new leadership of CEO Brian Moynihan, who took over the top job in 2009.

WASHINGTON, DC - SEPTEMBER Warren Buffett (L), chairman of the board and CEO of Berkshire Hathaway, walks on stage with Bank of America CEO Brian Moynihan, before speaking in Gaston Hall at Georgetown University, September 19, 2013 in Washington, DC. Buffett also took questions from Georgetown students. (Photo by Drew Angerer/Getty Images)

Warren Buffett, left, and Bank of America CEO Brian Moynihan at a Georgetown University event in 2013. (Drew Angerer/Getty Images) (Drew Angerer via Getty Images)

The endorsement from Buffett certainly helped restore some market confidence in the bank. Its stock has since climbed nearly 400%.

Buffett stuck with Bank of America even as he began unloading stakes in other big lenders.

Between 2018 and 2022 he exited giant stakes in JPMorgan, Wells Fargo (WFC), and Goldman Sachs, some just months before the banking system upheaval that began in mid-March of 2023.

Buffett began unloading the Wells Fargo position after a series of scandals rocked the bank, including revelations that employees pressured by sales goals opened millions of accounts that customers didn’t want and charged fees that weren’t necessary.

“We’re very cautious … about ownership of banks and we do remain with one bank… I like Bank of America and I like the management,” Buffett said at Berkshire’s annual shareholder meeting in May 2023.

By June of this year, Bank of America accounted for 15% of Berkshire’s portfolio as the firm slashed its stake in Apple (AAPL).

Now it is the company’s third-biggest position behind Apple and American Express (AXP).

David Hollerith is a senior reporter for Yahoo Finance covering banking, crypto, and other areas in finance.

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