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- Warren Buffett's Berkshire Hathaway bet $2.1 billion on Bank of America stock in the summer of 2020.
- The investor's company has nearly doubled its money thanks to the stock surging since then.
- Berkshire spent less than $15 billion for a stake in the bank worth over $45 billion today.
After Warren Buffett failed to scoop up bargains during the pandemic crash last year, critics accused him of losing a step. The famed investor showcased his agility a few months later by plowing about $2.1 billion into Bank of America stock in the space of 12 trading days – and has almost doubled his money on the bet already.
Buffett's Berkshire Hathaway conglomerate pounced on the bank's shares in late July and early August last year, when they were trading in the $23-to-$25 range, SEC filings show. The stock has surged more than 80% since then to close above $45 on Thursday, marking its highest level since the financial crisis.
As a result, the roughly 85 million Bank of America shares that Berkshire bought last year are now worth $3.8 billion, representing a $1.7 billion gain in 14 months.
Berkshire's purchases boosted its Bank of America holding to just over 1 billion shares, giving it a 12% stake worth more than $45 billion at the current stock price. The conglomerate's latest annual report shows it spent less than $15 billion building the position, indicating it's made an unrealized gain of about $30 billion on the wager.
Buffett's company has counted Bank of America as one of its biggest holdings for years, so its aggressive buying of the stock last summer might not seem surprising. However, it contrasts sharply with Berkshire's sale of JPMorgan, Goldman Sachs, and other financial stocks over the past 18 months.
Bank of America stock climbed 4.5% on Thursday after the lender's third-quarter earnings beat Wall Street's expectations. The outperformance was fueled by the investment-banking division and record advisory fees in the period.