Background on Berkshire Hathaway and Warren Buffett
Berkshire Hathaway, led by the renowned investor Warren Buffett, is a multinational conglomerate holding company known for its significant investments in various sectors. Buffett, one of the most successful and influential investors globally, has built Berkshire Hathaway into a diversified business empire with interests ranging from insurance and energy to retail, railroads, and technology.
Kraft Heinz Investment and Tax Implications
Berkshire Hathaway has a substantial investment in Kraft Heinz, a conglomerate that produces and markets food and beverage products. In May, Kraft Heinz announced it was evaluating strategic options, which might include the separation or spin-off of certain brands. This announcement led to a tax implication for Berkshire Hathaway, causing a $3.76 billion after-tax depreciation on its Kraft Heinz investment.
Impact on Berkshire Hathaway’s Financial Performance
The tax impact from Kraft Heinz resulted in Berkshire Hathaway’s stocks falling 2.90% on Monday in the U.S. stock market, trading at $459.11—the lowest level since January 14, 2025.
Berkshire Hathaway reported a net income of $12.37 billion in the second quarter, which was lower than the $30.35 billion reported during the same period in 2024. The company’s revenue for the quarter ending June 30 fell to $92.52 billion from $93.65 billion in the corresponding period of the previous year.
Reduction of Bank of America Stake
Barron’s reported that Berkshire Hathaway seems to have continued reducing its significant position in Bank of America during the second quarter, based on clues in the report published on Saturday.
Although the regulatory filing did not explicitly detail individual stock transactions, Berkshire reported selling around $6.9 billion worth of Bank of America stocks while purchasing approximately $4 billion during the quarter. At the end of the first quarter, Berkshire held about 631 million Bank of America shares, representing an 8.5% stake in the financial institution.
Most of Berkshire’s original position of over 1 billion Bank of America shares was acquired approximately a decade ago through warrants with an exercise price of $7 per share, as reported by Investing.
If confirmed, this would extend Berkshire’s ongoing reduction of its Bank of America holdings, which began in July 2024. During the first quarter of 2025, Berkshire had already sold nearly 49 million shares, roughly 7% of its stake.
Key Questions and Answers
- What is the main reason for Berkshire Hathaway’s stock decline? The primary cause of the drop in Berkshire Hathaway’s stock price is a $3.76 billion after-tax depreciation on its Kraft Heinz investment, following Kraft Heinz’s announcement of evaluating strategic options.
- How has Berkshire Hathaway’s financial performance been affected? Berkshire Hathaway reported a net income of $12.37 billion in Q2 2025, a decrease from $30.35 billion in the same period of 2024. The company’s revenue for Q2 2025 was $92.52 billion, down from $93.65 billion in Q2 2024.
- What is Berkshire Hathaway’s current position in Bank of America? At the end of Q1 2025, Berkshire held approximately 631 million Bank of America shares, representing an 8.5% stake in the financial institution. The company has been gradually reducing its position since July 2024.
