Warren Buffett Cuts BYD Stake, Sells Stocks Valued At $47-M

Warren Buffett’s Berkshire Hathaway Inc. trimmed its stake in BYD Co., just over a month after speculation the legendary US investor was preparing to shed his entire position in the Chinese carmaker sent the stock plummeting, Katrina Nicholas and Ishika Mookerjee reported for Bloomberg.

Photo Insert: BYD stock, which closed slightly lower on Tuesday, sunk the most in nearly two years last month after a 20.49% stake.

Berkshire cut its holding in BYD’s Hong Kong-listed shares to 19.92% from 20.04% on Aug. 24, according to an exchange filing Tuesday. That equated to around 1.33 million securities at an average HK$277.10 ($35.30) apiece, valued at about $47 million.

BYD stock, which closed slightly lower on Tuesday, sunk the most in nearly two years last month after a 20.49% stake -- identical to the size of Berkshire’s last reported BYD position in Hong Kong as of December -- entered the Central Clearing and Settlement System.

This is “most likely profit taking,” said Kerry Goh, chief investment officer at Kamet Capital Partners Pte.

“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.” Asked if Buffett could be gearing up to sell more of his BYD holding, Goh said it was hard to second guess the titan of investing.

When Buffett sold shares in another of his Chinese investments, PetroChina Co., he did it in stages. The 2007 sale was conducted through at least seven transactions over a period of about three months.

“This may shake the firm belief in BYD shares for a lot of institutional investors,” said Franklin Tang, an analyst at Excel Investment Hong Kong Ltd.

“While there are those that hold a bullish view based on fundamentals, with stock prices having been on a roll there’s bound to be plenty of speculators as well,” Tang said. “This will make the latter very skittish as their conviction was largely based in trusting the judgment of Buffett.”

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