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Berkshire Hathaway: Warren Buffett further unwinds BYD investment in China

by News Desk
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Hong Kong
CNN business

Warren Buffett’s Berkshire Hathaway continues to exit long positions in BYD. China’s largest homegrown EV manufacturer After being Tesla’s main rival and holding for 14 years.

Legendary investor conglomerate BYD sells 3.2 million more Hong Kong-listed shares

Last week it reduced its stake to 15.99%. Submissions to the Hong Kong Stock Exchange shown on Tuesday. The sale was for about $80 million.

This is Berkshire’s fifth major stock sale.

BYD shares disclosed since August, according to public records. The pace of sales has increased significantly this month, and so far in November he has had three deals.

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

Berkshire had owned 225 million shares of BYD for 14 years before the first deal was announced in August.

US conglomerate first to buy BYD shares on average of HKD 8 ($1.02) per card in 2008; $230 million investment. At the time, BYD’s stock had fallen to record lows during the global financial crisis.

But then the stock price rebounded sharply. In 2020, BYD’s Hong Kong-listed shares surged 437% as the company developed a “blade battery” and his EV market in China boomed.

The company says the blade-shaped battery is thinner and longer than traditional lithium-iron cells. The result is maximum utilization of the available space within the battery pack. BYD says it is unlikely to catch fire even with severe damage.

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

In late June, BYD’s Hong Kong-listed shares hit a record high of HKD331.4 ($42). This was about 41 times the price Berkshire paid him 14 years earlier.

Berkshire has been selling BYD shares since the summer. The conglomerate has sold more than 49 million shares of her BYD stake in the past four months, according to the latest exchange filings.

It’s not clear how much profit Berkshire made on the sale. However, the average price of five deals announced by the company since August was about HK$205 (about $26).

CNN Business calculated that Berkshire could have sold 49 million shares and, assuming a purchase price of HK$8, could have used that average for a net profit of $1.2 billion. The conglomerate’s current stake in BYD is worth $3.9 billion based on the latest stock price.

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