BYD Shares Lose $1 Billion in Value

BYD, the Warren Buffett backed Chinese automaker, had its biggest ever single day loss in Hong Kong on Thursday. The company lost $1.2 billion in market value. This prompted the company to hold emergency analyst calls.

There are numerous rumors that are going around the market, but analysts ultimately said it was unclear as to why the shares have dropped so low since June 2013.

BYD shares, most popularly known for making electric vehicles and also having Warren Buffett own 9.1% of the outstanding shares, dropped 28.8% in value today and reached record trading volume. During the afternoon, the company had fallen as much is 47% in trading.

This was the biggest one-day drop percentagewise since the company’s Hong Kong listing back in 2002.

The Shenzhen listed shares had fallen a maximum of 10%, which led to a loss of roughly $1 billion in market capitalization.

In a statement made to the Hong Kong stock exchange, the company said that it “is not aware of reasons for such movement or of any information.”

Roughly 252.7 million shares of the company changed hands in Hong Kong today, which is about 50 times higher than its 90 day moving average.

After the market closed, BYD held a call with analysts. A spokesman for the company declined to comment about the discussion. Analysts were confused about the call timing, and many of them didn’t even have a chance to dial in.

When asked about Warren Buffett shares in the company, a BYD spokeswoman was unaware if the US investor had sold any shares. She said the operations at the company are normal.

On Thursday, the company made a statement to the Shenzhen stock exchange about its Russian exposure but felt like this was insignificant, as opposed to Geely Automotive which is one of the rivals.

Russian export sales were below $1 million, so ultimately it didn’t suffer any foreign exchange losses.

Geely Automotive Holding shares had dropped 17% on Wednesday, and this was the biggest drop that it had seen in 12 years. The automaker in China said that profit is possibly slumping due to currency losses and exports from Russian operations, its biggest market overseas.

On Thursday, shares of the company were down 3.1%.

BYD, currently part of a joint venture partnership with Daimler AG, the premier German automaker, as well as other Chinese carmakers, have been losing market share to some of their foreign rivals. The Chinese auto market is increasingly more competitive.

The company did not drop in electric vehicle orders or output of their electric cars, so the loss is unexplainable at this point.

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