Warren Buffett's Berkshire Hathaway has slashed its BYD stake by 22% in 4 months – and raked in a roughly $1.2 billion profit on the shares sold

© AP Warren Buffett. AP

  • Warren Buffett’s Berkshire Hathaway has sold about $1.3 billion of BYD stock in recent months.
  • Berkshire spent about $49 million on the shares, meaning it has realized an estimated 25-fold return.
  • Berkshire has slashed its stake in the Chinese electric-vehicle company by 22% so far.

Warren Buffett’s Berkshire Hathaway has cashed in about $1.3 billion of BYD stock over the past four months, scoring a roughly 25-fold profit on the shares it sold, a Markets Insider analysis has found.

The legendary investor’s company paid $232 million for 225 million shares of the Chinese electric-vehicle maker in 2008. After listing the entire position on the Hong Kong Stock Exchange’s clearing system on July 12, it has now slashed it by 22% to 176 million shares as of November 17, exchange filings show.

Berkshire only paid around $1 a share when it first invested in BYD, and has now sold 49.4 million shares for around $26 each. That figure is the weighted-average selling price for about 30% of the total shares sold — all that’s included in the filing — meaning it’s only a rough estimate.

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Still, if Berkshire spent $49 million on shares it has now sold for nearly $1.3 billion, it has realized a $1.2 billion or 25-fold profit.

BYD investors have balked at Berkshire’s disposals, and the prospect of Buffett and his team dumping more shares or eliminating their position entirely. They have sent the EV company’s stock price down 43% since July 11, the day before Berkshire’s shares appeared in the clearing system.

Berkshire’s share sales, coupled with the sharp drop in BYD stock, mean the conglomerate’s remaining stake is worth about $3.9 billion on paper — less than half its peak value of $8.8 billion in late June.

Hong Kong’s stock-exchange rules only require Berkshire to disclose transactions that alter its percentage stake by a whole number. Therefore, Berkshire can sell another 11 million shares before its ownership of the automaker’s Hong Kong-listed stock falls below 15%, and it has to update the market.

Berkshire’s decision to slash its BYD stake is somewhat surprising, as it’s been on a historic buying spree this year. It bought a record $49 billion of stocks on a net basis in the first three quarters of this year, and recently bolstered its stakes in Japan’s five biggest trading houses from 5% to over 6%.

Read more: Goldman Sachs says the S&P 500 will remain flat through 2023. Here’s their 5-step playbook for finding returns — and avoiding crippling losses — next year.

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