BYD Stock Is Sinking. Warren Buffett May Be One Reason Why.

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Shares in

BYD

sank on Tuesday amid speculation that high-profile investor Warren Buffett’s

Berkshire Hathaway

was selling off its position in the Chinese electric-vehicle maker.

A 20.5% stake in

BYD

(1211.H.K.) was entered into Hong Kong’s Central Clearing and Settlement System, Bloomberg reported, citing exchange data. This is roughly the same size of

Berkshire Hathaway
’s
(BRK.A and BRK.B) ownership position in the company as of its most recent report in Hong Kong last December, Bloomberg estimates.

BYD stock dropped 12% in Hong Kong trading following the news. Berkshire Hathaway stock slipped 0.3% in U.S. premarket while futures for the

S&P 500
were 0.7% lower.

The addition of BYD shares onto the clearing system is not an ironclad signal that they will be sold—but it remains a significant move, because the stock must be in the system ahead of the settlement of any transaction. It certainly seems like traders are reading the situation that way.

And Warren Buffett wouldn’t be blamed for selling his stake in BYD, which he has owned since 2008—when the automobile manufacturer launched the world’s first production plug-in hybrid-electric vehicle.

Buffett’s 2021 investor letter detailed that Berkshire Hathaway owned 225,000,000 shares in BYD, which has seen its stock price gain around 450% in the last five years and 2% in 2022.

Write to Jack Denton at [email protected]