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Warren Buffett snaps up $800m Bank of America stake

Warren Buffett ups stake in Bank of America

Warren Buffett ploughed more than $800m into Bank of America stock this week boosting his stake in the banking giant.

The billionaire investor and Berkshire Hathaway chief executive bought just under 34 million shares at an average price of $24 between Monday and Wednesday, according to SEC filings.

The investment cost $813m and boosts his total holding in the lender by 3.6% to nearly 982 million shares, or 11.3% of the business.

Berkshire’s increased stake is worth about $23.9 billion, based on Bank of America’s stock price of $24.31 as of Wednesday’s close.

The bank’s shares have plunged 32% this year, meaning Berkshire’s stake would have been worth around $35bn at the start of the year.

Bank of America is Berkshire’s biggest bank holding, and the group’s second biggest stock in its portfolio behind Apple.

Buffett also holds stock in Wells Fargo, JPMorgan, US Bancorp and Bank Of New York Mellon. Unlike the other banks, Bank of America has a strong Main Street presence.

The world’s most famous investor sold his entire airline holding in May, made up of Delta Air Lines (NYSE: DAL), American Airlines Group (NASDAQ: AAL), Southwest Airlines Co (NYSE: LUV), and United Airlines Holdings (NASDAQ: UAL). These assets were 4.2% of Berkshire Hathaway’s portfolio and sold for $9.4bn.

Buffett has come under some criticism over the last month for sitting on Berkshire’s cash pile, which totalled $137bn at the end of the first quarter.

However, Berkshire struck a $10 billion deal to acquire most of Virginia-based Dominion Energy’s natural gas transmission and storage business earlier this month.

Many market watchers will take these moves as a sign that Buffett is again willing to write big checks while hunting for bargains in the middle of a raging pandemic.

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Roger Baird

Roger Baird is News Editor at Finixio. He has worked as a financial journalist for 20 years reporting on companies, capital markets and the UK economy.