Warren Buffett wishes to buy and sell stocks in secret? ‘Psychological hurdle…’

Warren Buffett's Berkshire Hathaway has reduced its Bank of America stake to 9.99%, allowing for less frequent trade disclosures.

Warren Buffett can take his time to reveal trades in Bank of America Corp. stock now that his conglomerate’s stake has been trimmed below a 10% regulatory threshold requiring rapid disclosure.

Warren Buffett's Berkshire Hathaway trimmed its Bank of America stake to 9.99%, reducing disclosure frequency. Despite generating $10.5 billion from sales, investors face uncertainty as Buffett's reasons for selling remain undisclosed. (AP)

A selling spree that began in mid-July has helped his Berkshire Hathaway Inc. reap about $10.5 billion from its massive, years-long investment in the bank, whittling down the holding to 9.99% of the lender’s outstanding shares.

Through 15 rounds of disposals, US rules have required Buffett to disclose trades within a few days. But a regulatory filing Thursday shows the stake is now small enough that Buffett may provide updates quarterly — potentially leaving fellow shareholders in the dark for months if he sells further.

That may quiet a drama that keeps weighing on the minds of investors.

“At a minimum, we suspect this holder getting below 10% would lift a psychological hurdle and could allow the stock to regain some forward momentum,” Piper Sandler analyst Scott Siefers wrote in a note this month.

Buffett, 94, hasn’t commented on why he’s pulling back from the investment, which had long lent his imprimatur to Bank of America Chief Executive Officer Brian Moynihan. The billionaire’s Omaha, Nebraska-based conglomerate plowed $5 billion into the bank in 2011. In 2019, it applied for Federal Reserve approval to boost the holding beyond 10%.

Berkshire remains the bank’s biggest stockholder, with a stake worth about $31 billion, based on Thursday’s closing price. This year’s disposals have already helped Berkshire recoup more than it paid to acquire the holding.