Warren Buffett’s Berkshire Hathaway cuts stake in Chinese EV maker BYD for the 10th time, sells 2.48 million shares for US$69 million
- The share sale on March 31 has reduced Berkshire’s holding in Shenzhen-based BYD to 10.9 per cent from 19.92 per cent in August last year
- BYD’s shares have slumped 33 per cent from a record HK$331.40 on June 28 last year, after having risen sixfold over the previous two years
The shares were sold for HK$539.8 million (US$68.8 million) on March 31 at an average price of HK$217.67 per share, according to stock exchange data. Following the divestment, Berkshire’s interest in BYD has dropped to 10.9 per cent from 11.13 per cent, and compared with 19.92 per cent when the Omaha, Nebraska-based investment firm began trimming its exposure last year.
Berkshire has disposed of a total of 105 million shares in BYD since August 24, based on public disclosure. The firm bought 225 million shares in BYD at HK$8 a piece during the 2008 global financial crisis, earning an about 30-fold return over a 14- year holding period.
BYD’s shares dropped 2.3 per cent to HK$222.60 on Wednesday in Hong Kong and its Shenzhen-listed shares fell 2.6 per cent to 243.40 yuan. The decline in its Hong Kong-traded stock has widened to 3.1 per cent this month, extending the overall slump to 33 per cent from the record close of HK$331.40 on June 28 last year. The stock surged sixfold over the preceding two years.
“The main issue for BYD is that the stock has risen too much and has overshot [industry and corporate] fundamentals,” said Wang Chen, a partner at Xufunds Investment Management in Shanghai. “That’s why some investors, including Buffett, are selling it.”
