November 30, 2022

Berkshire Hathaway: Warren Buffett further unwinds BYD investment in China

2 min read

Hong Kong
CNN Business

Warren Buffett’s Berkshire Hathaway continues to unwind its long position in BYD, China’s largest domestic EV manufacturer And Tesla’s arch rival, after holding it for 14 years.

A collection of legendary investors A further 3.2 million Hong Kong-listed shares of BYD were sold.

Last week, cutting its shares by 15.99%, a Hong Kong Stock Exchange Filing showed up on tuesday. The sale was valued at approximately $80 million.

This is the fifth major share sale by Berkshire.

BYD shares have been disclosed since August, according to public records. Sales momentum picked up significantly this month with three transactions so far in November.

Berkshire did not give a reason for the sale. The company did not immediately respond to a request for comment from CNN Business.

Before the first deal was disclosed in August, Berkshire had held 225 million shares of BYD for 14 years.

The American conglomerate previously bought BYD shares on average. Of HK$8 ($1.02) each in 2008, with $230 million investment. At the time, BYD’s shares had hit record lows during the global financial crisis.

But the stock has risen sharply since then. In 2020, BYD’s Hong Kong-listed shares surged 437% as the company developed its “blade battery” and China’s EV market boomed.

The company says the blade-shaped battery is thinner and longer than traditional lithium-iron cells. As a result, it can maximize the use of available space within the battery pack. According to BYD, it is less likely to catch fire even when severely damaged.

BYD has already overtaken Tesla to become China’s best-selling EV brand. Last month it sold 103,157 pure electric vehicles in China. In comparison, Tesla delivered 71,704 vehicles from its China factory, according to data from the China Passenger Car Association.

In late June, BYD’s Hong Kong-listed shares hit a record high of HK$331.4 ($42). That was about 41 times the price Berkshire paid 14 years ago.

Since the summer, Berkshire has been on a selling spree of BYD stock. Based on the latest exchange filing, the conglomerate has dumped more than 49 million shares of BYD in the past four months.

It is unclear how much Berkshire has benefited from the sale. But the average price per share in the five deals disclosed by the company since August was around HK$205 ($26).

Using that average, Berkshire would have realized a net profit of $1.2 billion by offloading 49 million shares, assuming a purchase price of HK$8, according to CNN Business. The conglomerate’s current stake in BYD is worth $3.9 billion, based on the latest stock price.

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