BYD is broke

[Hypocrite-The]

Is It Time to Throw in the Towel on BYD Company?
In this article:
Key Points
Warren Buffett's Berkshire Hathaway just finished exiting its position in BYD.

BYD is expanding its product lineup into ultra-luxury segments.

BYD derives some of its competitive edge from its vertical integration.

BYD Company, a Chinese electric vehicle (EV) juggernaut, quickly took over its home market before stepping out into the world. And then it started taking over global sales, too, signaling not only had it arrived as a global powerhouse but that it was here to stay.

BYD's stock has been a high flyer over the years, but arguably its most well-known investor just exited his stake in the company -- is it a red flag for investors?

BYD Sealion.
Image source: BYD.
What's going on?
Warren Buffett's Berkshire Hathaway has fully exited its position in BYD, per an SEC filing, which ends a lengthy 17-year investment that boasted a staggering increase in value over that time frame.

Berkshire Hathaway began investing in the Chinese automaker way back in 2008 when it paid $230 million for roughly 225 million shares, or about 10% of the company at the time. It was a true Warren Buffett move in that he was greedy when others were fearful. Perhaps now comes the other side of the coin -- when others were greedy, he decided to exit the position. The investment was an amazing call as its shares increased by about 3,890% over the time Berkshire Hathaway owned them.

Buffett's company began selling BYD shares in 2022 after a massive run-up in share price over the years. It comes at a questionable time for the Chinese automaker as its domestic sales, which make up roughly 80% of its global shipments, dropped for the fourth straight month in August. In fact, the company even cut its annual sales target by as much as 16%, down to 4.6 million vehicles.

To be fair, investors can sell for any number of reasons. Perhaps an investor has a need for cash, or to rebalance a portfolio, harvesting tax losses (not in this case), or simply cashing in on a big winner. Despite Buffett's Berkshire Hathaway exiting its stake in the Chinese automaker, there are still plenty of positive developments for investors wishing to keep their shares.

Ultra-premium
When investors think about BYD, they likely imagine an automaker that caught Tesla in global sales by undercutting the competition with rock-bottom pricing. That's one thing the automaker is attempting to change as it has begun developing a line of ultra-premium vehicles that should help boost its brand image. In fact, the company is now offering some luxury models with price tags topping $200,000 -- essentially the opposite of its brand image that is known for mainstream volume and affordability.

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What it all means​

Ultimately, while it's easy to think it's time to exit BYD after a massive run-up and its most well-known investor calling it quits, there's plenty of room left for long-term shareholders. BYD is a solid company expanding its brand into more lucrative vehicles, has a diversified business, and profitable growth to be had in its home market and potentially the U.S. market. BYD's share price has been soaring for years, and there's no reason to think that's about to come to a screeching halt.

Should you buy stock in BYD Company right now?​

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[syed putra]

If BYD kaput , it means CCP kaput. Will it be possible?

BYD a small portion of china economy. It maybe biggest battery manufacturer, but there are plenty more if it falters.

 

[syed putra]

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $652,872!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,092,280

All the USD used to import products into the US ended up in US assets. But that chain is breaking up. Outside of the US, they are dumping into gold and silver.

 

[Hypocrite-The]

All the USD used to import products into the US ended up in US assets. But that chain is breaking up. Outside of the US, they are dumping into gold and silver.

Thanks I will buy gold n silver

 

[Hypocrite-The]

BYD a small portion of china economy. It maybe biggest battery manufacturer, but there are plenty more if it falters.

Which is bigger and more profitable byd or catl? Is catl owned by byd?

 

[k1976]

If BYD kaput , it means CCP kaput. Will it be possible?

It mean CCP has keyed all loses into BYD, sharrholders n investors will foot the bill