Warren Buffett’s Berkshire Hathaway cut BYD shares for the first time in 14 years, according to a filing released on Tuesday on the Hong Kong stock exchange.
A well-known investor conglomerate last week sold about 1.3 million shares of a Chinese electric car maker for about $47 million. The sale reduced their holdings from 220 million shares to 218.7 million shares, filings show.
Berkshire originally reported that in 2008 he invested his $232 million in 225 million shares of his BYD stock and that position was intact as of the end of December. It’s unclear why he went public with 220 million shares before the sale this month.
When Buffett’s company first invested in BYD, it paid about $1 per share. Selling less than 1% of his stock at an average price of $35 yielded a profit of about 3,400%.
The remaining shares were valued at about $7.3 billion at Tuesday’s close. This meant the company had more than $7 billion in unrealized gains on its investment.
Berkshire announced this on July 12, listing all of its shares on its CCASS, the Hong Kong Stock Exchange’s clearinghouse system.
The move sparked speculation that Buffett and his team were preparing to pocket some of BYD’s profits, which has now been proven correct.
Buffett, who has stuck to investments in American companies such as Apple and Coca-Cola throughout his career, was initially reluctant to invest in Chinese companies.
His business plummeted after his partner Charlie Munger hailed his CEO of BYD, Wang Chuanfu, when Thomas Edison, Henry Ford, and Bill Gates became one of his.
