Tesla rival BYD gets backing from Communist Party’s newspaper after US$19 billion stock rout as Buffett’s Berkshire trims stake
- The Economic Daily tells investors to take the divestment by Berkshire in their stride, saying the respected Buffett is not always right in his stock sales
- BYD stock has lost US$19 billion in market value in Hong Kong and Shenzhen since August 24 when Berkshire first disclosed its divestment
“BYD’s core investment value is not determined by Buffett’s buying or selling, but by its growth potential and leadership in technology,” according to the article penned by Yang Zhongyang, a senior reporter in Beijing. “EVs have become mainstream in the transformation of the global auto industry, as well as in green development. This will not change whether Buffett sells BYD shares or not.”
Berkshire’s decision to trim its BYD stake may just be an action by a long-time holder taking some money off the table, the daily said, after its shrewd investment grew 30-fold since 2008. Buffett is not always right, the newspaper said, citing gains in Walmart and Wells Fargo after he sold down his positions.
BYD rose 2.5 per cent to HK$221.60 in Hong Kong on Friday, while its A shares rose 0.5 per cent to 279.70 yuan in Shenzhen trading. Other industry peers also rallied, with Nio surging 5.7 per cent to HK$144 and Xpeng adding 3.4 per cent to HK$62.9o.
Friday’s gain helped investors recoup some of the US$19 billion sell-off in BYD shares since August 24, the date Berkshire first disclosed its sale of 1.33 million shares for HK$369 million (US$47 million) on average. Berkshire sold another 1.716 million shares on September 1 for HK$451 million, trimming its holding to 207.14 million shares.