Buffett's Berkshire Trims Stake In China's BYD, A Holding Since 2008
Warren Buffett's Berkshire Hathaway Inc has trimmed its stake in BYD Co, seven weeks after prompting speculation it might sell its entire multi-billion dollar stake in the largest Chinese electric car company.
In a Hong Kong Stock Exchange filing, Berkshire said it sold 1.33 million Hong Kong-listed shares of BYD for about HK$370 million (US$47 million), reducing its stake in BYD's total issued H shares to 19.92% from 20.49%.
Tuesday's filing is the first confirmation that Berkshire has reduced its BYD investment since the 20.49% stake entered Hong Kong's Central Clearing and Settlement System on July 11, with Citigroup serving as custodian.
BYD's share price fell nearly 12% the next day.
Buffett's company had acquired 225 million BYD shares in 2008, giving it a 7.73% stake, equal to the 20.49% stake in H shares, according to BYD's annual report.
Berkshire paid $232 million for its shares, whose value had by Tuesday grown to about $7.5 billion.
Buffett, who is Berkshire's billionaire chairman and chief executive and turned 92 today, has said his business partner Charlie Munger, 98, was the impetus for the investment.
Neither BYD nor Berkshire immediately respond to requests for comment.
Berkshire owns dozens of businesses including the BNSF railroad and Geico auto insurer, and stocks such as Apple Inc and Bank of America Corp.
It does not announce plans to sell individual stocks, knowing that other investors may mimic Buffett and sell their own.
Berkshire has spent more than $57 billion this year buying other stocks such as oil companies Occidental Petroleum Corp and Chevron Corp.
Electric vehicle sales in China have risen in recent months, benefiting from government measures to spur demand.
On Monday, BYD said rising sales from January to June helped offset disruptions from supply chains and domestic outbreaks of COVID-19.
BYD also overtook Elon Musk's Tesla Inc as the world's largest seller of electric vehicles.
In a research note on Tuesday, Daiwa Capital Markets analyst Kelvin Lau raised his 12-month price target for BYD, but said Berkshire's sale could put the stock "under pressure" in the near term.
© Copyright Thomson Reuters 2024. All rights reserved.