Warren Buffett-Backed Automaker's Shares Plunge 12% As Berkshire Cuts $47M Stake: Analyst Sees Signs Of 'Big Correction'

Shares of BYD Co. Ltd. BYDDF BYDDY fell more than 12% on Wednesday morning Hong Kong session after Warren Buffett’s firm Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) trimmed its stake in the company.

What Happened: Berkshire sold 1.33 million shares of BYD at an average price of HK$277.1 (about $47 million), with the group now owning 218.719 million shares, cutting its stake to 19.92% from 20.04%, as per an exchange filing. 

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Earnings: BYD’s first-half gross profit had more than tripled to nearly 3.6 billion yuan ($521 million), driven by rapid growth in sales volume that helped it partially offset inflationary pressure from raw materials. Revenue in the same period rose 65.71% to 150.6 billion yuan, led by strong sales.

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Expert Take: Yang Liu, Atlantis Investment’s chairperson and chief investment officer told CNBC’s “Squawk Box Asia” the latest move could be “warning signs that the market may be [coming] to a big correction.”

“There is too much uncertainty, and I think [Buffett] got a little bit nervous,” she said. 

“Maybe this recession in front of us for the U.S. economy and also a weaker Chinese consumption altogether brings down investors’ confidence to a larger scale."

Context: BYD has been increasingly shifting toward new energy vehicles — in particular, battery electric vehicles — with its flagship Han sedan pitting it in close competition with the likes of Tesla Inc. TSLA and Nio Inc. NIO. 

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