Berkshire Sells BYD
Berkshire Hathaway, the investment company owned by Warren Buffett, recently sold 1.55 million Hong Kong-listed shares of electric vehicle maker BYD for HK$351.81 million ($44.85 million), according to a filing on the Hong Kong Stock Exchange. This has lowered Berkshire’s holdings in BYD’s H-shares to 12.9%, down from 13.04%. Berkshire started selling the BYD shares in late August and has since reduced its holding by over a third.
Berkshire Hathaway first acquired 225 million BYD shares in 2008, giving it a 7.73% stake in the company. This was equal to the 20.49% stake in H shares, as stated in BYD’s annual report. BYD has since become the largest maker of plug-in hybrids and pure electric vehicles in the world, with a total of 1.86 million cars sold in 2022. This growth has been faster than that of Tesla, making BYD a highly attractive investment opportunity for many.
The recent sale of BYD shares by Berkshire Hathaway has raised questions about Warren Buffett’s investment strategy. Some experts believe that this may signal a shift in his investment focus, as he has been known for his long-term investment approach in the past. However, it is important to note that Berkshire Hathaway still holds a significant stake in BYD, and the recent sale may simply be a tactical move to rebalance its portfolio.
In addition, the electric vehicle market has become increasingly competitive in recent years, with many new players entering the market. This has led to concerns about the potential for saturation and increased competition, which may have influenced Berkshire Hathaway’s decision to reduce its holding in BYD. However, with the increasing demand for electric vehicles, BYD is still well positioned to continue its growth in the future.
It is also worth noting that Warren Buffett is known for his caution when it comes to investing in new technology. He has previously been skeptical about the potential of electric vehicles and has been slow to invest in the industry. However, his investment in BYD in 2008 showed that he is willing to take a risk when he sees a good opportunity.
In conclusion, the recent sale of BYD shares by Berkshire Hathaway is a significant event in the electric vehicle industry. Although it may signal a change in Warren Buffett’s investment strategy, it is still too early to tell. Regardless, BYD remains a highly attractive investment opportunity, with a strong position in the market and a promising future. With the increasing demand for electric vehicles, BYD is well positioned to continue its growth and success in the years to come.
STA Research (StockTargetAdvisor.com) is a independent Investment Research company that specializes in stock forecasting and analysis with integrated AI, based on our platform stocktargetadvisor.com, EST 2007.
