Buffett’s Remaining $34 Billion Bank Of America Stake Is Now Pure Profit

(Bloomberg) -- Warren Buffett’s continued disposals of Bank of America Corp. shares have now covered the billionaire’s investment cost, leaving him with a more than $34 billion stake that’s pure profit.

In a round of transactions disclosed in a filing Thursday, Buffett’s Berkshire Hathaway Inc. sold $896 million of the stock this week. That means total proceeds from share disposals since mid-July and dividends earned since 2011 have surpassed the $14.6 billion that the conglomerate spent to build its stake in the second-largest US bank.

The 94-year-old established Berkshire’s Bank of America investment with a $5 billion deal in 2011 for preferred stock and warrants. He converted the stake into common shares six years later, after the bank boosted its dividend. Over the span of his investments, the stock price has multiplied in value. It’s up about 21% this year, versus a 20% gain in the KBW Bank Index. 

Bloomberg’s calculations of Buffett’s profits don’t include the impact of taxes. Berkshire Hathaway didn’t respond to a message seeking comment.

The firm’s ownership in the bank could soon slide below the 10% regulatory threshold that requires it to disclose transactions within a few days. Once Buffett controls less than that, he may wait weeks to reveal transactions — typically offering only quarterly snapshots.

After years spent adding to the position and praising the bank’s leadership, Buffett has offered no public explanation for his decision to pull back. Commenting can be complicated, as US regulators don’t want major bank shareholders potentially exerting influence over lenders.

At the Barclays Global Financial Services Conference on Sept. 10, Bank of America Chief Executive Officer Brian Moynihan told the audience that he can’t simply dial up Buffett and ask “what exactly he is doing because frankly we can’t ask, and we wouldn’t ask.”

But “the market is absorbing the stock,” Moynihan added. “It’s a portion of the volume every day — and life will go on.”