In Effort To Boost EVs, BYD Will Sell More Stock
Warren Buffett made headlines when he invested heavily into China’s BYD, a fledgling green car maker. Now BYD is ready to introduce its electric bus to municipalities across America…but first it needs a bit more cash. In order to invest even more money into EVs, BYD is planning another stock offering.
BYD plans to offer some $550 million worth of stock, to be specific, a tremendous sum to you and me, but hardly noticeable to a billionaire like Buffett. The Berkshire-Hathaway chairman currently owns about 28% of BYD, and now might be a good time to get in on what could become a hot stock. The price of about HK$35 a share, or about $4.50 per share, 15% below the stock’s current value.
Why so cheap? Because BYD reported an 89% decrease in profit last year following a plummet in the sales of their gas-powered vehicles. BYD is considering going all-green, and the efforts are paying off with big orders for its electric buses in taxis in China. Here in the U.S., BYD has run into compliance issues with the Federal government for a $12 million contract in Long Beach, though its buses did just pass an important crash test.
Is BYD the next Tesla stock, or did Warren Buffett make a big mistake?