Has Warren Buffett’s China bet failed? This electric-vehicle maker has lost $9 billion in value

By: |
Published: May 2, 2018 11:29:46 AM

The rout in BYD Co. shares is nearing $9 billion as investors desert what was the world’s top stock only months ago.

BYD, which is part-owned by Warren Buffett’s Berkshire Hathaway Inc., has a habit of whipsawing investors.

The rout in BYD Co. shares is nearing $9 billion as investors desert what was the world’s top stock only months ago. The Shenzhen-based maker of electric vehicles lost another 3.6 percent in Hong Kong on Wednesday after two brokerages, which had been bullish on BYD, cut their rating to the equivalent of neutral.

That followed at least another downgrade last week, according to data compiled by Bloomberg. Its recommendation consensus — a gauge of analyst confidence in a stock on a scale of 1 to 5 — stands at 3.7, the lowest in almost three years.

Investors and analysts alike are losing faith in BYD’s ability to thrive with fewer government subsidies and growing competition, with the company last week predicting first-half profit may tumble as much as 83 percent. It’s among the year’s worst performing Chinese companies in Hong Kong, and has given back almost all of the gains triggered by last year’s euphoria over China’s plan to get rid of fossil-fueled cars.

BYD, which is part-owned by Warren Buffett’s Berkshire Hathaway Inc., has a habit of whipsawing investors. The shares have been either oversold or overbought — and often both — every year since its 2002 initial public offering in Hong Kong.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.