BYD Company (BYDDY) Stock Sinks as Warren Buffett Offloads Shares

BYD (OTCMKTS:BYDDY) stock is in the spotlight after it was revealed that Warren Buffett’s Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B) had sold some of its stake. However, the sale was only a small portion of Buffett’s position, less than 1% of his existing stake. According to a filing received today, the fund manager sold 1.33 million shares at an average price of 277.10 HKD. The sold shares had a value of about $47 million. After the sale, Buffett’s ownership fell to 19.92%, equivalent to about 219 million shares, from 20.04%.

Buffett first invested in BYDDY stock in 2008, taking on a $230 million position. Today, that position is worth around $8 billion.

The sale comes as somewhat of a relief for BYDDY stockholders. On July 12, shares of the Chinese automaker fell by 12% after a stake the size of Buffett’s position was added to the Hong Kong stock exchange’s Central Clearing and Settlement System. This led to speculation that Buffett was dumping his entire stake. Still, a lump sum scale would be unusual for the billionaire, as he usually sells out of a company in multiple transactions.

BYDDY Stock: Buffett Sells Shares

Kamet Capital Partners CIO Kerry Goh believes that the sale was most likely a profit-taking measure on a successful investment. “BYD has done very well for them especially in the last three years. It’s not their style to sell just because someone says China is uninvestable.” Goh was unsure when asked if Buffett would continue to sell down his position.

BYD stopped producing traditional internal combustion engine (or ICE) vehicles in March and has stepped up to the plate to compete with Tesla (NASDAQ:TSLA) in the electric vehicle (EV) market. Between January and June, BYD sold 324,000 EVs and 315,000 plug-in hybrid cars. In comparison, Tesla sold 565,000 EVs within that period.

In the second quarter, BYD sold 355,021 new energy vehicles (NEVs). NEVs include EVs, plug-in hybrids, and fuel cell vehicles. That figure was up 256% year-over-year (YoY) and 24% quarter-over-quarter (QoQ). Net income during Q2 also tripled from the year prior. Tesla reported delivering 254,695 EVs in the quarter, down 18% QoQ. Buffett does not hold a stake in TSLA.

BYD executive vice president Lian Yubo also previously stated that the company would provide Tesla with batteries. Tesla has not confirmed the collaboration.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.

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