Warren Buffett Reiterates Support for BYD
NEW YORK (TheStreet) -- Although many investors had speculated that Warren Buffett and Berkshire Hathaway (BRK.B) - Get Report would raise the possibility of selling their stake in Chinese auto and battery maker BYD, as its stock value has declined in the face of numerous troubles, the billionaire investor has instead reaffirmed his support for the company, according to reports.
On Monday, Buffett visited BYD's Shenzhen headquarters for a signing event for the company's plans to construct an energy storage facility with
China Southern Power Grid
and celebration of the selling of its millionth car,
Reuters
said.
Warren Buffett, chairman of Berkshire Hathaway, center, arrives for a BYD press event in Shenzhen, Guangdong province, China. |
Reuters
added that during the event, Buffett told his audience that his visit to Shenzhen wouldn't be his last, while
Bloomberg
said that Buffett said BYD would be an electric vehicle leader.
He indicated that the young company was filled with potential.
So far, all of BYD's electric E6 vehicles, launched earlier in 2010, have been operated as taxis in Shenzhen. According to
Bloomberg
, Buffett told BYD dealers that he had test-driven the vehicle in May and found it impressive.
According to
Reuters
, citing local reports, BYD spent several million yuan to bring Buffett to its China headquarters.
In 2008, Buffett's Berkshire Hathaway purchased 10% of BYD for $230 million. The value of the stake has now skyrocketed to a staggering $1.6 billion. Still, this latest figure is slightly less impressive than the $2.5 billion value achieved last October.
>>>View Warren Buffett's Portfolio
The value of Buffett's stake in BYD began to slide as the company encountered troubles this year -- including a setback in plans to export its electric vehicles, a fall in sales and a legal battle with the government involving land development. Many began to believe that he was ready to cash out of his investment.
Berkshire Hathaway stock is up 0.5% to $83.73 in late morning trading.
-- Written by Andrea Tse in New York.
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