BYD shares plummet after Warren Buffett sells entire stake
What's the story
Shares of BYD have taken a hit in Hong Kong, following reports that Warren Buffett's Berkshire Hathaway Inc. has divested its entire stake in the Chinese electric vehicle (EV) manufacturer. The company's stock plummeted by as much as 3.6%, marking its biggest decline in three weeks and making it one of the worst performers on a gage of Chinese shares listed in Hong Kong.
Confirmation
Berkshire Hathaway divests entire stake in BYD
A CNBC report on Sunday cited a spokesperson for Berkshire Hathaway Inc. confirming the sale of its entire stake in BYD. The investment was valued at zero as of March 31, according to a filing by Berkshire Hathaway Energy, the subsidiary that held BYD's shares. Buffett's firm had owned the stock for over 15 years, initially purchasing 225 million shares in September 2008.
Transition
BYD's transformation over 2 decades
Over the last two decades, BYD has transformed from an obscure Chinese battery supplier for cell phones to the country's largest maker of electric and hybrid vehicles. Berkshire Hathaway started selling its stake in mid-2022, with its holding falling below 5% last year. This breach of this level meant that the US firm was no longer required by Hong Kong Stock Exchange to disclose future sales.
Market challenges
BYD's share price and Berkshire Hathaway's investment journey
BYD's shares have fallen nearly 30% from their record high four months ago, amid fears over its ability to compete in a brutal price war in China. Berkshire Hathaway started investing in BYD on the recommendation of Buffett's long-time business partner Charlie Munger. In response to Berkshire Hathaway's decision, Li Yunfei, BYD's General Manager of Branding and Public Relations, said on Weibo, "In stock investing, buying and selling are normal practices."