Warren Buffett Stake Sends Chinese Battery Maker's Shares 42% Higher in Hong Kong
Shares of Chinese battery maker and 'green' car maker BYB Company Limited soared 42 percent today in Hong Kong trading, after this weekend's announcement that Warren Buffett is investing in the company.
BYD closed at HK$11.90 today (Monday), up from Friday's close of HK $8.40 but still well below the stock's October high of just over HK$20. (The stock does not trade in the United States.)
Berkshire's MidAmerican Energy Holdings is getting its 10 percent stake for even less than Friday's close: just HK$8 each for 225 million newly issued shares. It will pay a total of HK$1.8B, or 230 million in U.S. dollars.
MidAmerican Chairman David Sokol becomes a non-executive director on the BYD board.
According to Reuters, Sokol told reporters in Hong Kong today that Buffett's stake could go even higher. "We are thrilled to make an additional investment, if it makes sense, with BYD."
Bloomberg reports that at the news conference, Sokol said his company and BYD will cooperate on developing batteries to store energy generated by wind and solar collectors.
Merrill Lynch analyst Daniel Kim is quoted as saying, "The rationale behind this investment is BYD's unique exposure to both lithium-ion battery as well as its related hybrid electric vehicle business... HEV market growth is exploding."
BYD plans to sell hybrid automobiles in the U.S. and Europe, as well as China.
Current Berkshire stock prices:
Questions? Comments? Email me at firstname.lastname@example.org