Warren Buffett’s Berkshire Hathaway is continuing to unwind its position in BYD, China’s largest home-grown electric vehicle maker and Tesla’s major rival, after having it for 14 years, according to CNN.
The legendary investor’s conglomerate sold another 3.2 million Hong Kong-listed shares of BYD last week, trimming its stake to 15.99%, showed a Hong Kong stock exchange filing. The sale was valued at about $80 million.
According to public records, It is the fifth major share sale by Berkshire of BYD shares disclosed since August. The sales pace increased significantly this November, with three transactions this month.
Berkshire didn’t disclose the reason for the sales. The company did not immediately respond to a request for comment by CNN Business.
Berkshire’s BYD shares for years
Notably, prior to the first deal being disclosed in August, Berkshire held 225 million shares of BYD for 14 years.
In 2008, the US conglomerate bought BYD shares at an average of HK$8 ($1.02) apiece, with a $230 million investment. Back then, BYD shares fell to a record low during the global financial crisis.
Blade battery
However, since then, the stock has rebounded sharply. In 2020, BYD’s Hong Kong-listed shares rose 437% as the company developed its “Blade Battery” and China’s EV market boomed.
The company said the blade-shaped battery is thinner and longer than conventional lithium iron cells. It can maximize the use of available space within the battery pack. In addition, It is less likely to catch fire even when it is severely damaged, according to BYD.
BYD sales
The automaker has surpassed Tesla to become China’s best-selling EV brand. In October, it sold 103,157 pure electric vehicles in China. In contrast, 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 reached a record high of HK$331.4 ($42). That was about 41 times the cost Berkshire paid 14 years ago.
49 million BYD shares for four months
Since summer, Berkshire has been on a BYD stock-selling spree. Based on the latest exchange filing, the company dumped more than 49 million BYD shares in the last four months.
It is not clear how much Berkshire earned from the sale. However, the average cost of each share in the five deals disclosed by the conglomerate since August was around HK$205 ($26).
Using that average, Berkshire might’ve bagged a net profit of $1.2 billion by offloading the 49 million shares, assuming a purchase price of HK$8, according to CNN Business.
Based on the latest stock price, the conglomerate’s current stake in BYD is worth $3.9 billion.
