More focus on Warren Buffett after his Berkshire Hathaway revealed the second surprise sale of shares this week in China’s most successful electric vehicle company – the former battery maker BYD.
The first sale, revealed last Tuesday raised eyebrows even though it was worth just $US47 million in a portfolio valued at more than $US300 billion.
The second sale, revealed in another filing with the Hong Kong Stock Exchange on Friday, took the speculation to a new high – the value of that sale was a bit more – around $US53 million but the markets focused on the fact of two sales in a week after 14 years of sitting pat and riding a dabble into a multi-billion dollar market gain.
Berkshire said it sold 1.7 million BYD shares on Thursday for an average price of 262.72 Hong Kong dollars ($US33.47) each.
The filing showed that Berkshire’s stake had now dropped to 207.1 million shares. An earlier filing on Tuesday showed Berkshire had sold 1.3 million shares on August 24.
Berkshire had held 225 million BYD shares at the end of last year.
All up 3 million BYD shares were sold for a value of just over $US100 million, which is chump change in Berkshire’s massive portfolio.
The two sales have raised as many questions about Buffett’s big $US40 billion play in US energy companies Chevron and Occidental Petroleum.
After taking an initial stake in both, Berkshire and Buffett have chased Occident shares to the point where Berkshire is now the biggest shareholder with well over 20% and more when a separate, earlier holding of convertible shares are taken into account.
The sales certainly hit BYD shares, knocking the price of the Hong Kong quoted shares (the stock Buffett owns) down nearly 14% last week. BYD shares quoted on the mainland Shenzhen market shed almost 11% last week, despite the company revealed a solid half a billion dollar profit for the June quarter and a surge in August sales to 174,915.
That was more than double the 68,531 it sold a year earlier. The auto maker has sold 983,844 vehicles so far this year, more than double the 372,630 sold in the same period last year.
Buffett and other market watchers are now waiting for a third and subsequent sales to confirm that the Safe of Omaha has gone off China and taking the money and moving elsewhere.
But the near big falls in the BYD share price last week tells us that exiting China will come at a cost.