This week, Warren Buffett's Berkshire Hathaway acquired over 800 million worth of Bank of America stocks, raising its ownership in the banking titan to over 11 percent, filings with the SEC showed. Between Monday and Wednesday, Berkshire bought almost 34 million shares at an average price of about $24, which values the share at $813 million.
Berkshire's overall interest in BOA is worth almost $24 billion, based on the $24.31 stock price of the bank as of closing Wednesday, piling more money into the lender despite its 30 percent drop slump this year. Next to Apple, Bank of America was Berkshire's second-biggest holding in terms of dollar value at the end of March this year.
Berkshire is revving up its investment with BOA after getting the go-signal from the Federal Reserve when the group's holdings topped the 10-percent ownership mark, a key threshold that requires regulatory evaluation. In 2019, Buffett asked policymakers to be allowed to lift the stake, and the central bank of Richmond issued a no-objection note on April 20, a company spokesperson disclosed.
Berkshire's shares in Bank of America, which started from preferred stock and warrants, has transformed into one of the Omaha, Nebraska-based group's biggest holdings. Berkshire, which invests in multiple lenders, slashed some of those holdings in the first three months, including bets on JPMorgan Chase and Goldman Sachs Group. The company will post its second-quarter revision to those stakes within the next few weeks.
In recent weeks, Buffett has received criticisms for failing to deploy Berkshire's enormous cash hoard, which grew to around $137 billion in the first quarter this year. However, Berkshire inked a $10 billion contract to buy most of Dominion Energy's natural-gas properties earlier this month and seems to have acquired back between $5 billion and $6 billion of its share between late April and early July.
Buffett's increased investment with BOA signals that he is actively in the hunt anew for bargains, and willing to consolidate to his existing holdings at the right price. In May, Buffett struck a positive tone at the group's annual shareholders' meeting, which was held via livestream due to the ongoing coronavirus pandemic.
"Nothing can basically stop America... the American magic has always prevailed and it will do so again," he told shareholders during the meeting. However, the "Oracle of Omaha" also disclosed that he sold out of his airline holdings because of the uncertainty brought about by the pandemic.
