BYD sinks as Buffett cuts stake, Daiwa predicts full withdrawal

(Bloomberg) — Traders unloaded more shares of BYD Co. on Monday after a second filing showed that Berkshire Hathaway Inc. of Warren Buffett has further reduced his stake in the company.

Most Read by Bloomberg

Shares of the Chinese automaker fell as much as 6.8 percent to their lowest since May 10 in Hong Kong. The selloff extended the stock’s losses to nearly 30 percent since a stake in BYD that matched Berkshire’s stake appeared on Hong Kong’s clearing and settlement system in July.

Berkshire’s waning interest in the stock, combined with the prospect of an eventual exit, outweighed the news that BYD is now the world’s second-largest supplier of electric car batteries. A year-on-year jump in new energy car sales in August also failed to lift sentiment.

“We really expect Berkshire Hathaway to fully exit its position,” said Kelvin Lau, an analyst at Daiwa Capital Markets Hong Kong Ltd. “While we expect the company’s fundamentals to remain strong, we expect the sale of Berkshire Hathaway’s stake to put short-term pressure on share prices.”

Theories about Buffett’s plans for China’s leading electric car company have swirled since a 20.49% stake – identical to the size of Berkshire BYD’s last reported position in Hong Kong from late June – entered the central clearing and settlement system in July .

Selling BYD shares is an old-school investment move by Buffett

Berkshire has already disposed of about 18 million BYD shares and still holds an 18.87 percent stake, or about 207 million shares, as of last Thursday, according to a Hong Kong stock exchange filing.

(Updates with more details in the second paragraph.)

Most Read by Bloomberg Businessweek

©2022 Bloomberg LP

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *