BYD bids Warren Buffett’s Berkshire an unfazed farewell: Selling is ‘normal’
Hours after we first reported last week that Berkshire sold off the remainder of its stake in BYD earlier this year, the Chinese electric vehicle maker confirmed the news and thanked Warren Buffett and Charlie Munger for believing in the company, News.Az reports citing CNBC.
In a post on the Chinese social media site Weibo, BYD public relations executive Li Yunfei wrote, as translated by Google: “In August 2022, Berkshire began gradually reducing its holdings of company shares purchased in 2008, and by last June, its stake had fallen below 5%...Investing in stocks involves both buying and selling, which is completely normal...We are grateful for Charlie Munger’s and Warren Buffett’s recognition of BYD, as well as for the investment, support, and companionship over the past 17 years...Praise to all long-term believers!”
BYD Executive Vice President Stella Li, appearing on CNBC Europe’s Access Middle East this week, echoed the Weibo post, saying Buffett and Munger “loved” BYD and its management, but “they are investors, so naturally buying and selling is their business, so it’s not because they don’t like us.”
And Reuters quotes a special adviser to BYD, Alfredo Altavilla, as saying that Buffett “made a profit of 20 times the capital he invested. He did very well to do what he did.”
“We’ve been extremely glad to have had Buffett (as an investor), but the fact that he monetised [UK spelling] his position is exactly what Berkshire Hathaway does for a living: buying, earning and selling.”
Investors around the world, however, were not as accepting.
BYD shares fell more than 6% this week in Hong Kong.
They are down more than 28% year-to-date, including a big plunge in early June.
As evidence that its strong growth in recent years is cooling, the company cut its 2025 sales target by 16%, lowered prices through the end of the year, slowed production, and last month it reported its first quarterly profit decline in more than three years.
Second Japanese stake tops 10%
While Berkshire is closing out its Chinese investment, it continues to expand its holdings of Japanese “trading house” stocks.
This week, Mitsui said in a news release that it was “informed” by Berkshire that “they now hold 10% or more of the voting rights in Mitsui as a result of an additional acquisition of our shares.”
It did not, however, know the exact number of shares Berkshire now owns.
In a March 17 disclosure, Berkshire reporting holding a 9.8% stake of 285,401,400 Mitsui shares. They would be valued at around $7.3 billion at today’s close.
Late last month, a Mitsui official told Reuters Berkshire raised its stake but declined to give a percentage.
At the same time, Mitsubishi said in a regulatory filing that Berkshire’s stake had increased to 10.2% from 9.7%.
We haven’t heard anything about Berkshire’s three other Japanese holdings, Itochu, Marubeni, and Sumitomo, but it would not be a surprise to learn those stakes have also gone above 10%.
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