BYD Co Ltd, one of the many Chinese automakers, though famous actually for being backed by Warren Buffett’s investment fund, wants to go through a record share slump by showing executives have confidence in the company’s future.
The Chinese carmaker recently announced that its chairman, Wang Chuanfu, actually also the president and CEO, opted to increase his stake in the company and might opt to purchase even more shares in a sign of confidence after last week the stock collapsed. Chuanfu bought one million of BYD’s Hong Kong-listed shares, raising his holding in the electric carmaker to no less than 23.1% – according to company fillings posted on the Shenzhen and Hong Kong stock exchanges. The statements commented that Wang “has confidence toward the future prospects of the company,” after the stock dropped 29% for the largest one-day fall in what was an uncharacteristic slide that axed around $1.2 billion of its market capitalization.
“Mr Wang has indicated that he does not rule out the possibility of further increasing his shareholding in the company if and when appropriate in the future,” BYD further said. Following the unexplained drop the company held meetings with analysts and released statements reassuring the company is financially healthy. So far, the stock has rallied back 3.5% in Hong Kong while the Shenzhen shares also climbed 4.3%.