Berkshire Hathaway Inc. has sold off another block of BYD Co. shares, taking its stake in one of the world’s biggest carmakers to under 5% from more than 20% two years ago.
Warren Buffett’s investment firm now holds 4.94% of the Chinese automaker, according to a Hong Kong exchange filing Monday, down from 5.06%. Dropping below the 5% threshold means that Berkshire Hathaway is no longer obligated to disclose any further sales, or whether it exits its position altogether.
Buffett, renowned as one of the world’s most astute investors, saw a 2,000% gain from his early bet on BYD, which went from a little-known Chinese battery provider for cell phones to the biggest electric and hybrid vehicle maker in a little over 20 years. At a market valuation of $100 billion, BYD is the third most-valuable carmaker globally after Tesla Inc. and Toyota Motor Corp.
Other early investors have also been profit taking. Himalaya Capital once held 75 million shares for a share of around 8.2% but its interest dipped below 5% in 2021.
Himalaya’s Chairman Li Lu was the one who recommended the Chinese automaker to the late Charlie Munger, Berkshire’s former vice-chairman. Berkshire purchased 225 million of BYD’s Hong Kong-listed shares in 2008 for $232 million.
BYD’s market leading position stems in part from its vertical integration that keeps costs down — the company makes its own EV batteries and semiconductors and even has its own ship to send cars abroad — but also from its strong line up of attractive, well designed cars along all points of the price spectrum.
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