In an SEC Form 3 filing, Berkshire Hathaway (NYSE:BRKa) disclosed that it owned 950 million shares of Bank of America (NYSE:BAC) as of July 17. This stake is currently valued at $29 billion, which is Berkshire’s second largest common stock holding behind its $50 billion stake in Apple (NASDAQ:AAPL).
This represents an increase of $1.5 billion or 6% from the 896,167,600 shares it reported owning at the end of March.
It also puts the stake at 10.4% of the bank’s shares outstanding. The filing says:
The beneficial ownership of the shares of Common Stock reported herein exceeds 10% as a result of the issuer’s repurchases of its own securities, based on the issuer’s most recently announced number of shares of Common Stock outstanding.
Buffett says that generally he likes to keep holdings below 10% because that level brings increased regulatory scrutiny, especially for bank stocks.
The Fed, however, has a proposed rule change that could increase the limit to 25%.
At this year’s Berkshire annual meeting, Buffett said if the rule does change, “there will be companies where we drift up over 10 percent simply because they’re repurchasing their shares. That’s been the case with Wells [Fargo], and it’s been the case with an airline [Delta Air Lines] or two in the last year or so. So, if we like 9.5 percent of a company, we’d like 15 percent better, and you may see us behave a little differently on that in the future.”