Warren Buffett's Berkshire Hathaway has sold $760 million worth of shares in Bank of America, one of its major investments, over the past three sessions, according to regulatory filings dated September 6. The sale involved 18.7 million shares, contributing to Berkshire's growing cash reserves, which now total $277 billion. Since July, the total amount from reducing its stake in the bank has reached $6.97 billion. Despite these sales, Berkshire remains the largest shareholder of Bank of America, holding an 11% stake valued at $34.7 billion.

This recent sale raises the possibility that Berkshire's stake in America's second-largest bank may fall below the 10% threshold, which would necessitate further regulatory disclosures within a few days of such transactions.

Berkshire Hathaway's cash holdings have more than doubled over the past two years and are approaching the $300 billion mark. One reason behind Buffett's ongoing reduction of positions in key stocks could be his anticipation of higher corporate taxes. "With present fiscal policies, I think something has to give. And I think higher taxes are quite likely," Buffett remarked during the Berkshire AGM in May 2024.

The company has faced challenges in deploying its cash, with few attractive deals available. At the annual shareholder meeting, Buffett indicated he would only invest if opportunities presented 'very little risk and can make us a lot of money.'

In addition to the recent sales, Berkshire's shareholding for the June quarter also disclosed minor stakes in cosmetics chain Ulta Beauty and aerospace firm Heico. Earlier this year, Berkshire significantly reduced its stake in Apple, selling more than half of its shares in the tech giant.

Berkshire Hathaway's market capitalisation has recently surpassed the $1 trillion mark, placing it alongside only six other companies of this magnitude: Apple, Nvidia, Microsoft, Alphabet, Amazon, and Meta Platforms. This sustained reduction in Bank of America shares has led many market observers to question the rationale behind holding such a substantial amount of cash at this juncture and the broader implications it may suggest.