Warren BUFFETT“A public-opinion poll is no substitute for thought.”
Bernard BARUCH“Millions saw the apple fall, but Newton asked why.”
BYD founder Wang Chuanfu reportedly sold all his H shares
Data from Hong Kong Stock Exchange shows that BYD founder recently sold all his H share holdings cashing in HK$279 million, capitalizing the recent price run up due to Warren Buffett and Charlie Munger’s endorsement of the company. BYD company spokesman said that Mr. Wang continues to hold 38.5% of the company in internally issued shares and remains optimistic about the future of the company. This sale is required by BYD’s internal audit committee and the purchaser is a foreign institutional investor who bought for long term investment purposes.
http://hk.biz.yahoo.com/090519/263/3drs5.html?s=1211.hk
Various Chinese media also reported BYD is now involved in a bitter legal battle of corporate espionage with Foxconn Technology Group owned by the third richest man in Taiwan. BYD was accused of stealing corporate secrets by hiring away top engineers from Foxconn. One of the BYD founders was briefly arrested in 2008 due to this criminal investigation.
In 2007, Foxconn sued BYD for the second time for misusing confidential information. Foxconn International Holdings Ltd. filed the new lawsuit against BYD Co. Ltd. seeking RMB 6.51 million ($866,152) in compensation for the misuse of confidential information, according to an announcement released by BYD.
See the following Chinese blogs about BYD being involved in patent infringement and corporate espionage legal battles. Some claimed that BYD has a history of making technological or product anouncements that the company later failed to deliver.
http://bbs.koubei.com/thread_224_30024_1.html
http://bbs.koubei.com/thread_40_6986_1.html
http://bbs.koubei.com/thread_229_124336_1.html
BYDDF’s earnings dropped about 40%. The fundamental value of the business doesn’t warrant a 300% advance in stock prices. There are many uncertainties whether their new cars could be a success or not. Some claim that the company said nothing when it is already behind the schedule of the products’ promised delivery time.
If Buffett had a margin of safety upon his well-timed purchase, I think that margin of safety completely disappeared due to the red hot Fortune article. It is amazing what an article could do to a thinly traded small issue.