(Photo= Yonhap news)

 

[Alpha Biz= Reporter Kim Sangjin] Warren Buffett, the investment genius, has once again sold shares in the Chinese electric vehicle company BYD, reducing his stake from 7% to 5.99%.

According to documents submitted to the Hong Kong Stock Exchange by Berkshire Hathaway on the 25th (local time), the company reduced its stake in BYD to 5.99% on the 19th of last month. Earlier, Berkshire Hathaway had also sold 1.35 million shares of BYD, worth $40 million, on the 17th, reducing its stake from 7.02% to 6.9%. Hong Kong financial authorities require disclosure each time a major shareholder reduces their stake. However, Berkshire Hathaway will no longer be obligated to disclose its sales if its stake in BYD falls below 5%.

Last week's sale by Berkshire Hathaway marked the first significant reduction in its BYD holdings in 10 months. CNN noted, "The sale comes amid heightened global trade tensions surrounding China's affordable electric vehicles," and pointed out that "China has become a powerhouse in the electric vehicle market thanks to substantial government subsidies, but the possibility of a trade war with Western powers has also increased." The Biden administration raised tariffs on imports of Chinese-made electric cars from 25% to 100% in May, while Europe plans to impose additional provisional tariffs ranging from 17.4% to 38.1% on top of the existing 10% tariff.

Berkshire Hathaway's investment in BYD began in 2008 when the company invested $230 million to acquire 225 million shares, securing a 10% stake. Particularly, it was known that Charlie Munger, then vice chairman of Berkshire Hathaway who has since passed away, led the investment in BYD. By June 2022, BYD's stock price had surged nearly 41 times from the original price paid by Berkshire Hathaway, cementing itself as one of the most successful investment cases in the company's history. 

 

 

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