Berkshire Hathaway reduces its stake in Bank of America for the first time since 2019 following a robust market performance.

The bank's strong 2024 run ended with its first holding being trimmed in four and a half years.

On Wednesday, Thursday, and Friday, Warren Buffett's conglomerate sold 33.9 million shares of Bank of America shares for almost $1.5 billion at an average selling price of $43.56, according to a regulatory filing.

Since the fourth quarter of 2019, Berkshire Hathaway has reduced its stake in Bank of America for the first time. Despite this, Bank of America remains Berkshire's second-largest equity position after Apple, with 999 million shares and a market value of almost $43 billion. Additionally, Berkshire remains Bank of America's largest shareholder with a 10.8% stake.

Berkshire could be cashing in on its gains as Bank of America has surged 27.4% this year to its highest levels since March 2022. In the first quarter, Buffett reduced Berkshire's Apple stake by 13% for tax purposes after realizing substantial profits.

The news caused a 1% decline in premarket shares of Bank of America on Monday.

Bathtub idea

The Oracle of Omaha's acquisition of Bank of America in 2011, worth $5 billion in preferred stock and warrants, has become one of the most beloved Wall Street stories.

Buffett later disclosed that he came up with the idea while soaking in his bathtub.

At Berkshire's annual meeting in 2017, when he first converted the warrants and added the bank stock to his portfolio, Warren Buffett revealed that he got the idea for the BofA purchase while sitting in the bathtub and checking with the bank about their interest in the preferred stock.

The investor, who is 93 years old, stated that he was drawn to CEO Brian Moynihan's leadership and the bank's ability to generate profits.

Despite initially being rejected by Bank of America's call center, Buffett was able to reach Moynihan and the deal came together within hours.