Buffett got out of BYD stock. They went up 4500% after his first investment

Warren Buffett's investment company Berkshire Hathaway has fully exited its extremely profitable investment in China's largest electric car maker BYD. Buffett's company first bought BYD shares in 2008 - since then they have risen in price by more than 4500%. On the news of the exit of the famous investor quotes BYD fell at the trading in Hong Kong, despite the company's attempt to reassure investors.

Berkshire Hathaway Energy - the Berkshire subsidiary that held BYD shares - reported that the value of that investment had declined to zero by March 31, 2025. Buffett's company has held a stake in BYD for about 17 years - it bought its first 225 million securities in September 2008. Since then, the Chinese automaker has transformed from a little-known supplier of cell phone batteries into Tesla's main competitor, and its shares had risen more than 4,500% by the end of March this year.

"Investing in stocks is buying and selling, and that's fine!" - Li Yunfei, BYD's general manager of branding and public relations, tried to reassure investors. But the market was not convinced: on the morning of Sept. 22, BYD shares collapsed 3.6 percent in Hong Kong and were among the worst performing stocks in the Hang Seng China Enterprises stock index, according to Bloomberg.

Berkshire opened a position in BYD at the urging of Buffett's business partner Charlie Munger, who bought shares along with Himalaya Capital chairman Li Lu. At the 2009 annual shareholders meeting, Munger said that while it might have seemed as if "Warren and I had lost our minds," he considered the company itself and its CEO Wang Chuanfu "a bloody miracle," CNBC recalls.

Buffett's investment firm began reducing its stake in BYD in August 2022 - after the position's value rose 41% to $9 billion in the previous (second) quarter. "The Oracle of Omaha" never disclosed the reasons for the selloff. In a 2023 CNBC interview, he said BYD was an "outstanding company" run by an "outstanding person," but added: "I think we'll find a use for the money that seems more right to me."

Around the same time, Berkshire sold almost all of its stake in Taiwanese chipmaker TSMC for about $4 billion - just a few months after the purchase. Buffett attributed the decision to a reconsideration of the geopolitical risks associated with Beijing's claims on Taiwan. "The world [has] become dangerous," the legendary investor noted.

By June 2024, Berkshire had reduced its stake in BYD by 76%, bringing it below 5%. After that, the investment company was no longer required by Hong Kong exchange rules to disclose sales. The subsidiary Berkshire Hathaway Energy reported its investment in BYD was valued at $415 million by the end of 2024, Reuters notes.

BYD shares are now trading 30% cheaper than the all-time high reached four months ago. Bloomberg attributes the fall in the carmaker's stock price in recent months to growing investor doubts about the company's ability to withstand competitors in China amid a fierce price war.

According to MarketScreener, 24 out of 28 analysts covering BYD stock recommend them to buy (Buy and Outperform ratings). The average target price of 124.28 yuan per share ($17.4), calculated by the service, implies a 20% increase in quotes over the next year.

This article was AI-translated and verified by a human editor