Warren Buffett’s stock portfolio took a $1.6 billion hit from Bank of America and Wells Fargo in a single day
- Warren Buffett’s Berkshire Hathaway took a $1.6 billion hit to its portfolio after Bank of America and Wells Fargo shares dropped more than 5% on Wednesday.
- Shares slumped after the banks reported double-digit declines in revenue and net income for the third quarter.
- Berkshire boasted an almost 12% stake in Bank of America — the second-biggest holding in its portfolio after Apple — and owned more than 3% of Wells Fargo at the last count.
- Buffett’s company plowed $2.1 billion into Bank of America over 12 straight trading days to August 4, while it has slashed its Wells Fargo position by more than 60% this year.
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Warren Buffett’s Berkshire Hathaway suffered a $1.6 billion blow to its portfolio from just two stocks on Wednesday, as Bank of America and Wells Fargo slumped more than 5% after reporting their third-quarter earnings.
Berkshire has significant exposure to Bank of America, as the lender is the second-largest holding in the company’s stock portfolio after Apple. Buffett’s company added to the position over 12 straight trading days to August 4, spending $2.1 billion to boost its stake to 1.03 billion shares or almost 12%.
The slump in Bank of America stock on Wednesday wiped $1.4 billion off the value of Berkshire’s increased position, reducing it to $24.4 billion. The bank’s stock price is down by more than a third this year.
Berkshire took a smaller hit from Wells Fargo as it has a smaller position in the troubled lender.
The conglomerate has been a shareholder for more than 30 years, and counted the bank among its five most-valuable holdings for most of that period. It owned more than 500 million shares valued at north of $27 billion in 2016.
However, it gradually trimmed the holding over the next few years, then slashed it by more than 60% this year. As a result, it held fewer than 140 million shares in September, representing 3.3% of the total shares outstanding — its smallest stake in the bank 17 years.
Wells Fargo’s stock slump on Wednesday cut the value of Berkshire’s position by about $205 million, to $3.2 billion. The bank’s shares are down 57% this year.
The $1.4 billion hit from Bank of America and the $205 million blow from Wells Fargo meant Berkshire saw a total of $1.6 billion in value erased from its stakes, assuming their size hasn’t changed since it last updated investors.
(the headline, this story has not been published by Important India News staff and is published from a syndicated feed.)