By
Godfrey Benjamin
January 2nd, 2024
Berkshire Hathaway purchased 225 million of the EV maker’s shares for $230 million in 2008.
American multinational conglomerate Berkshire Hathaway (NYSE: BRK.B) sold 2.52 million shares of Chinese EV maker BYD listed in Hong Kong on the 19th of June. A stock exchange filing revealed that the investment company sold the shares for HKUS$ 675.80 million, equaling $86.3 million.
Berkshire Cuts China’s BYD Shares Holdings
Following the sale of the BYD share, Berkshire Hathaway’s holdings in the Chinese company’s issued H-shares reduced from 9.21 % to 8.98%. Notably, Berkshire Hathaway is not new to selling part of its shares. As a matter of fact, it is not the first time this year the investment company will be selling its shareholdings in other companies. Before its move on BYD, Berkshire Hathaway traded most of its Taiwan Semiconductor Manufacturing Company (TSMC) stock. It performed a major cut, reducing its holdings by 86%. Meanwhile, it bought the shares around three months prior to the sale.
The American multinational conglomerate purchased the shares in November 2022, causing TSMC’s stock to surge. Shortly after the $5 billion investment, the semiconductor manufacturing company saw its stock decline 4% in Taipei amid broader market losses. Berkshire’s decision to offload TSMC’s stock came as a surprise to the market, including the co-president of Taishin Securities, Tony Huang, who said:
“It’s surprising that Berkshire cut its holdings so much in just a quarter, which differs from its past practice of long-term investment and continuing to add shares.”
Berkshire’s Selloffs
As Huang said, the investment company typically holds on to its acquired shares on a long-term basis. It also buys more shares from the same company after the initial acquisition. However, the recent decision concerning TSMC is a deviation from the usual practice. As for BYD, Berkshire Hathaway purchased 225 million of the EV maker’s shares for $230 million in 2008. Since the acquisition, the American company’s investment has boomed. The last time the shares of BYD peaked in June 2022, Berkshire Hathaway’s investment was worth $9.5 billion.
In February, the South China Morning Post (SCMP) reported the second biggest of nine publicly disclosed transactions since Berkshire began to trim its BYD stake in August 2022. The SCMP noted that the cutback on the 3rd of February took $2.6 billion off the table within a six months selling spree. The spree included a $1.33 million BYD shares sold-off reported by Coinspeaker. At the time, the sale was worth $34.43 million, and the company’s holdings dropped from 15.07% to 14.95% on the 8th of December, 2022.