Berkshire Hathaway Inc., the investment firm headed by finance mogul Warren Buffett, earned a $1 billion profit from an investment made less than a year ago in Chinese automaker BYD Co. (Build Your Dreams – which Buffett definitely did). Since the deal was announced on Sept. 27, the company’s trading value has jumped fivefold, effectuated by Buffet’s Investment and the rising Chinese demand for fuel efficient vehicles.
MidAmerican Energy Holdings Co., a subsidiary of Berkshire, struck a deal whereas they agreed to purchase from BYD Co. 225 million new shares for at a purchase price per share of HK$8, or a total of HK$1.8 billion. Based on the market closing price on July 31 of this year, that same stock was worth an astounding HK$9.66 billion. BYD confirmed the sale, and Buffet couldn’t be reached for comment.
BYD, which also manufactures rechargeable batteries, has also agreed to look into possible cooperation agreements with Volkswagen AG in the development of a hybrid cars and lithium – battery powered electric vehicles. The company also plans to work with MidAmerican on developing rapid charge batteries for storing energy generated wind and solar sources, according to David Sokol, MidAmerican Chairman.
-By Stephen Calogera