A stock exchange filing showed Berkshire Hathaway, the investment company owned by Warren Buffett, has sold 1.3 million Hong Kong-listed shares of Chinese EV maker BYD for HK$267.69 million ($34.43 million), according to Asia Financial.
The investment house has now sold over one-quarter of its position in five months.
Berkshire began trimming stake in August
Buffett has been cutting down his stake in the battery and electric vehicle maker in 2022. The firm began lowering its stake in BYD in August when it trimmed its holding from 20.49% to 19.92%. The pace of sales boosted in November. It only has to disclose sales of 1% or more, with any transactions to counterparties under that figure not revealed, according to Bloomberg.
Additionally, that was the first time Berkshire Hathaway had lowered its stake in the quickly expanding automaker in 14 years.
At the time, the company’s stake in BYD was 20.49%. Now, the company’s holding stands at 14.95%.
BYD’s stock fell about 31% since a Berkshire-sized stake was shown to enter the Hong Kong exchange clearing system on July 11, according to Webb-Site.com, burning HK$248 billion ($31.9 billion) from its market value.
Top BYD executive Stella Li stated in a Bloomberg News interview that Buffett still believed in the company but defended his reasoning to take out some returns on his long-held position in the automotive giant.
Berkshire Hathaway started BYD investment in 2008
Berkshire, which remains BYD’s biggest shareholder in Hong Kong, invested in the car manufacturer in September 2008, purchasing 225 million shares for around $230 million. The value of that stake grew over 2,700% to HK$331 per share through June 2022, when the automaker hit a record high.
As of Tuesday, Berkshire’s remaining 164 million shares are worth about $4.4 billion. The company has regained around HK$3.4 billion from the six substantial stake sales of 1% or more, though those sales present less than one-third of what was declared.
BYD’s November sales figures
Despite the recent stock decline, the EV company continues to notch up record monthly sales figures, selling more than 230,000 new-energy vehicles last month. And in the third quarter of 2022, it sold 534,164 units (almost-evenly split between fully-electric cars and hybrids) compared to Tesla, which shifted some 343,830 battery-powered cars.
A fund manager at LW Asset Management Advisors Ltd., Andy Wong, stated he anticipated BYD to continue with its original plans, referring to the company’s efforts to dominate the market and expand and maintain its leading position with a new model pipeline.
Wong says he was “a bit surprised that they don’t care about the price movement in last few months,” citing BYD’s somewhat optimistic reaction to the investor’s disposal.
