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September 08, 2020 at 02:24 PM
Warren Buffett’s Berkshire Hathaway has slashed its stake in Wells Fargo stock by more than 40% to 136 million shares as it continues to reduce its holdings financial stocks.
The sale, revealed in a filing with the Securities and Exchange Commission, follows the company’s 25% cut in its Wells Fargo position in the second quarter and leaves the famed investor’s company with a 3.3% stake in the bank.
Prior to these sales, Berkshire Hathaway was Wells Fargo’s largest shareholder and the bank was one of Berkshire’s largest positions.
Wells Fargo stock had lost almost 54% year to date through Friday and was down an additional 3% by midday Monday. In contrast, the Financial Sector SPDR ETF — which includes Wells Fargo and Berkshire Hathaway B shares, its leading holding — has lost 33% this year, and the KBW bank index has lost 34%.
In the second quarter, the San Francisco-based bank lost $2.4 billion, or -$0.66 per share, vs. profits of $6.2 billion, or $1.30 per share, a year ago and $653 million, or $0.01 per share, in the first quarter. It also set aside $9.57 billion in Q2 for potential loan losses, more the doubling the $3.83 billion it set aside in the prior quarter.
Wells Fargo is in the process of making job cuts, following its sale of hundreds of millions of dollars in assets earlier this year in order to meet the $1.95 trillion asset limit imposed on it by the Federal Reserve after its fake-accounts scandal, according to a Wall Street Journal report.
