"BYD, Warren Buffett Stake Sale Controversy Ignites... Increased Supply and Demand Uncertainty"

Citibank Counter Shares Surge to 225 Million
Matches Warren Buffett's Holdings, Stock Price Down 12%

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Minji Lee] The stock price of Chinese electric vehicle manufacturer BYD has plunged sharply. This is due to news that Western Capital Group (100% owned by Berkshire Hathaway Energy), owned by Warren Buffett, is either selling or transferring BYD shares, which has dampened investor sentiment.

On the 13th, BYD closed at 270.200 Hong Kong dollars on the Hong Kong Stock Exchange, down 11.93% from the previous day. As recently as the 7th of this month, it was trading at 325 dollars, but it has dropped more than 17% in less than a week.

The stock price fell sharply after it was confirmed that the number of shares at Citibank counters surged by 225 million shares. Since this number of shares matches the amount Warren Buffett holds, rumors spread in the market that Buffett is stepping away from BYD shares for the first time in 14 years. Buffett reportedly bought BYD shares at 8 Hong Kong dollars per share in 2008 and has not sold a single share since. Western Capital Group is listed as BYD’s fourth largest shareholder with a 7.7% stake.

Jinsoo Jung, a researcher at Hyundai Motor Securities, said, “Since no clear shareholding changes have been confirmed from other broker trends, it is estimated that the share changes at Citibank counters are based on major shareholders.”

Investors have offered various interpretations regarding this. Possibilities include Warren Buffett depositing physical certificates at Citibank counters for conversion to electronic securities, ongoing partial sales where reporting obligations for shareholding changes have not yet arisen, or transferring shares to Citibank counters to lend shares to hedge funds.

Regarding this, researcher Jung analyzed, “This is a scenario quite similar to the recent Tencent major shareholder share sale case, so it is a plausible scenario that Warren Buffett has started selling shares through Citibank counters.”

Given the increased uncertainty in stock prices, investors are expected to find it more advantageous to trade mainland stocks, which have relatively lower supply-demand uncertainty, rather than Hong Kong stocks. Researcher Jung explained, “For long-term investors, focusing on fundamentals rather than supply-demand issues is important, and excluding these issues, the medium- to long-term growth potential remains valid,” adding, “Looking at mainland stock valuations, they are relatively undervalued compared to Hong Kong stocks.”

This content was produced with the assistance of AI translation services.