Warren Buffett Sells More BYD Stock. Why the Shares Are Rising Anyway

According to the information disclosed by the Hong Kong Stock Exchange, Warren Buffett's company Berkshire Hathaway reduced its stake in BYD Company (01211) by 1,347,500 shares at an average price of HKD 230.46 per share on Jun 11, with a total amount of HKD 310 million. The shareholding ratio decreased from 7.02% to 6.9%.

During his 14-year investment in BYD, Buffett has gained significant profits through multiple reductions. Market analysis suggests that Buffett's reduction may be for better capital allocation and profit taking. Buffett himself has also said that reducing his stake in BYD was to find better uses for the funds. Meanwhile, Buffett has always had a high opinion of BYD and has called it a great company.

In the past, Buffett has called the auto industry difficult, while Buffett's former partner Charlie Munger praised BYD and its lead over Tesla.

BYD shares rose 1.7% in overseas trading on Mon. Its U.S.-listed American depositary receipts were up 1.8% in premarket trading, while futures on the S&P 500 and Nasdaq Composite were flat and up 0.2%, respectively.

The stock's gain isn't a shock. The sales have already happened, and Berkshire has been a seller for years.

Coming into Mon trading, BYD's Hong Kong-listed shares were up about 9% so far this year. Investors have been balancing increasing competition among EV companies against growth in sales. Through May, BYD had shipped almost 1.3 million EVs this year, about 27% more than in the first five months of 2023.