Warren Buffett's Berkshire Hathaway has cut its stake in Moody's by 16.6 percent, reducing its exposure to the beleaguered credit rating agency by selling almost eight million shares over three days.
In a filing with the SEC late today (Wednesday), Berkshire says it held 40,013,700 shares as of July 22. That's 16.98 percent of Moody's shares outstanding.
Berkshire reported holding 48 million shares as of March 31. That would be a stake of just over 20 percent.
Moody's shares fell sharply in after-hours trading on the news. They closed today at $26.52 and were trading at $24.35 just after 6p ET.
Berkshire's National Indemnity sold the shares on the open market over a three-day period starting Monday. The selling prices ranged from $28.73 to $26.64, with an average of $27.25. The sales raised $217.6 million for Berkshire.
Today's filing notes that there could be additional sales, and while there are no "present plans" to purchase more shares, that could also happen in the future.
The major credit rating agencies, including Moody's, have been heavily criticized for failing to warn investors about the subprime mortgage collapse. The Obama administration recently proposed new rules designed to stop the credit agencies from consulting for the same companies they are also rating.
And last year, Connecticut Attorney General Richard Blumenthal called Berkshire's relationship with Moody's a "symptom of flaws in a system rife with conflicts of interest and problematic relationships."
Moody's stripped Berkshire of its triple-A credit rating earlier this year.
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