Shares in BYD, a Chinese auto and battery maker backed by U.S. billionaire Warren Buffett, plummeted more than 13 percent to a near two-and-a-half year low on Tuesday after the company warned it could post a third-quarter loss, triggering a raft of analyst downgrades.
BYD warned late on Monday that its net profit for the first three quarters may fall between 85 to 95 percent due to fierce competition in China, the world's largest auto market.
Buffett's Berkshire Hathaway paid about $230 million in 2009 for 225 million shares in the company and made the investment because of BYD's battery technology. That stake was worth as much as $2.47 billion in October 2009 when the stock peaked at HK$85.5 each. The stake is now worth about $475 million.
The failure of BYD to deliver on its promises for both cars and battery technology has analysts concerned. Buffett admitted at the time of the investment that he did not know anything about cars or batteries and was talked into the investment by his partner Charlie Munger and former Berkshire executive David Sokol, who left the company under a cloud.
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