BYD denied the Warren Buffett exit rumor after its stock tanked 12%

July 12, 2022 0 Comments

BYD, a Chinese electric vehicle maker, saw its stock slumped around 12% on Tuesday after Warren Buffett was speculated to sell his shares in the company. This is BYD’s biggest drop in almost two years. Buffett, the world-famous billionaire is the CEO and Chairman of Berkshire Hathaway, which holds 20.49% stake of BYD in Hong Kong Stock Exchange as of December last year.

Earlier today, a 20.49% stake entered the Hong Kong’s Central Clearing and Settlement System(CCASS). Traders have interpreted it as a sign for Buffett to soon sell those stakes, since stocks need to enter the system before any transaction. The high profile investor has held held his stake outside of CCASS for the past thirteen years.

Buffett initially bought BYD shares in 2008, when they only worth 8 HKD per share. BYD stock has took off dramatically since 2020 and now increased to more than 270 HKD. In April this year, it has once reached the height of 314 HKD.

Traders are alarmed by the implicit move, even though neither Buffett or Berkshire Hathaway or Citigroup Inc – the custodian for most of the new shares in CCASS commented on the matter. Following the news, the EV maker’s stock slumped 11.93% in HongKong at the time of writing.

BYD has denied the claim. “According to the relevant rules of the Hong Kong Stock Exchange and the SFC, the reduction of shareholdings by major shareholders is subject to declaration of interests,” BYD told Securities Times, and adds that no information on the equity disclosure platform of the Hong Kong Stock Exchange suggests stake held by Buffett’s firm has changed. However, BYD shares continued to fall after the report.

Earlier this month, it was made public that BYD’s half-year EV deliveries exceeded estimates and overtook Tesla as the most popular EV maker in the world. According to the company’s fillings, 641,350 passenger vehicles, buses, and commercial vehicles of BYD have been delivered YTD(year-to-date), with 134,036 EVs delivered in June.

Tesla defenders question the data’s authenticity as the number includes both BEVs(battery electric vehicle) and PHEVs(plug-in hybrid electric vehicle). Some thinks BYD has skewed the data by including PHEV, which has internal combustion engines.

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