#BerkshireHathaway #WarrenBuffett #ElectricVehicles
Warren Buffett's Berkshire Hathaway Adjusts Stake in BYD: A Legacy of Visionary Investment
Berkshire Hathaway, the multinational conglomerate led by Warren Buffett, has recently trimmed its stake in BYD, China's leading electric vehicle (EV) manufacturer. The company sold an additional 1.3 million Hong Kong-listed shares of BYD, totaling $39.8 million, decreasing its holding to 6.9% from 7%.
The initial investment in BYD dates back to 2008 when Berkshire acquired approximately 225 million shares for around $230 million. This strategic bet, driven in part by the late Charlie Munger, proved highly profitable as the EV market experienced exponential growth in China and beyond.
Following a significant surge in BYD's stock price, Berkshire had previously divested half of its stake through sales in 2022 and 2023. The company's shares reached a record high in April 2022, nearly 600% higher than their value at the start of 2008.
Hong Kong's regulatory requirements mandate a filing when a stake percentage reaches a whole number. Should Berkshire's stake fall below 6%, another filing will be necessary.
BYD's origins date back to the 1990s when it produced batteries for mobile phones. By 2003, the company had transitioned to automobiles and has since emerged as the top car brand in China and a significant producer of EV batteries. In the final quarter of 2023, BYD surpassed Tesla as the world's leading EV manufacturer, selling more battery-powered vehicles than its U.S. counterpart.
Buffett acknowledged Munger's role in the successful investment, stating in 2010, "Charlie Munger deserves 100 percent of the credit for BYD." Munger's interest in BYD was sparked by his friend Li Lu, the founder of Seattle-based asset manager Himalaya Capital.
Original Article: https://www.cnbc.com/2024/06/17/warren-buffetts-berkshire-hathaway-trims-its-stake-in-chinese-ev-maker-byd-to-6point9percent.html
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