- Warren Buffett’s Berkshire Hathaway has sold around $600 million of BYD stock since mid-July.
- Berkshire has cut its stake in the Chinese EV maker by 8% to 207 million shares, worth $5.7 billion.
- Buffett’s company has made around 35 times its money on the stock sold so far.
Warren Buffett’s Berkshire Hathaway has cashed in about $600 million of BYD stock in under two months, pocketing a roughly 35-fold profit on the Chinese rival to Elon Musk’s Tesla, a Markets Insider analysis shows.
The famed investor’s conglomerate spent $232 million to acquire 225 million shares of the electric-vehicle maker in 2008. It listed the entire position on the Hong Kong Stock Exchange’s clearing system on July 12, then cut it by 8% to 207 million shares by September 1, exchange filings show.
Berkshire paid around $1 a share when it invested in BYD, and has now sold nearly 18 million shares at a weighted-average price of $35, based on the stock’s trading range in recent weeks.
The disposals, and fears that Buffett and his team will keep selling or even eliminate the holding entirely, have sparked a 30% plunge in BYD’s stock price since July 11, the day before Berkshire’s stake appeared in the clearing system.
The conglomerate’s remaining BYD stake is worth about $5.7 billion on paper, down 35% from a peak of $8.8 billion in late June.
Under stock-exchange rules, Berkshire only has to disclose transactions that change its percentage stake by a whole number. As a result, Buffett’s company can sell another 9.6 million shares before its ownership of BYD’s Hong Kong-listed shares drops below 18% and it’s required to update the market.
Berkshire’s decision to trim its BYD stake this year was foreshadowed by Buffett’s business partner, Charlie Munger, ostensibly selling $50 million of the automaker’s stock in December. Munger was introduced to BYD by a hedge fund manager named Li Lu, whose fund also sold more than a quarter of its BYD shares last summer, and may have exited the position entirely since then.
Munger persuaded Buffett to invest in BYD by championing its CEO, Wang Chuanfu, as “Thomas Edison, Henry Ford, and Bill Gates all in the same person.”
Read more: Veteran investor Steven Check has $655 million riding on Warren Buffett’s Berkshire Hathaway. He explains why he’s still bullish on the stock, and analyzes Buffett’s $50 billion stock-buying spree this year.