Warren Buffet’s Berkshire Hathaway Beefs Up Bank of America Stock

Warren Buffet's Berkshire Hathaway Beefs Up Bank of America Stock

This week, Warren Buffet added to his existing massive stake in Bank of America despite a coronavirus pandemic on Monday, Tuesday & Wednesday. In one of his earlier interviews, he stated that the banking sector is doing great even in the tough times of Covid-19,  this deal seems to be proof of his beliefs.

As per SEC (Securities and Exchange Commission) filing, Berkshire Hathaway has spent about an average of $24 per share while making it up to 33.9 million shares in the banking giant BofA, which is close to $813.3 million. This is quite a big jump that adds to 11.9% in its previous stake.

Since July 2020, Warren Buffet’s Berkshire Hathaway is acquiring more and more of Bank of America’s stocks. It has been reported that the subsidiaries have spent $337 million from 31 July to 4 Aug for an additional 13.6 million shares of BofA. According to the Federal Reserve’s spokesperson, the company has been granted permission to double its existing BofA stake accounting to 24.9%. The permission was given in April by The Richmond Federal Reserve on an application filed by Berkshire Hathaway to beef up its 10% ownership limit.

These latest purchases by Berkshire Hathaway come right after its $10 billion deal for natural-gas assets of Dominion Energy, repurchasing over $5 billion of its existing stocks. All these spending activities by Buffett are coming after its prolonged inactivity following the Covid-19 crash.

Berkshire Hathaway is a famed conglomerate and multinational holding company run by Warren Buffet who is the investor, CEO, and chairman of the company. And, if we dwell upon its interest in Bank of America, this is Berkshire’s 2nd largest holding in terms of dollar value after Apple by the end of March 2020.

It was 2011, when Buffett started investing in Bank of America with $5 billion of stocks, paying back around 6% dividend annually.

editor
Leon Teague has recently joined FinanceOrange team as a Sub-Editor. He has years of experience in writing about finance industry and also worked for local newspapers previously. He is an intense traveller. In his free time, he loves to explore unexplored places.

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