Buffett may sell stake in BYD

U.S. billionaire Warren Buffett could deliver some tough talk to BYD Co Ltd when he visits the Chinese automaker next week, including potential plans to sell down his stake in the former high flyer that has hit a speed bump.

BYD was China's fastest-growing car maker last year but has encountered a host of problems in 2010, including sliding sales, a delay in plans to export its electric cars, and a legal dispute with the government over land it wants to develop.

Buffett's Berkshire Hathaway Inc bought 10 percent of the company in 2008 -- an investment that has yielded handsome rewards with the stake now worth $1.6 billion, nearly seven times the original $230 million purchase price.

Still, the current value is well off a peak of $2.5 billion reached last October, leading some to speculate that Buffett may be tempted to cash out part or all of his investment for a return that is still impressive by any measure.

"Buffett's visit to BYD may not be good news for the company," said Andrew To, sales director at Tai Fook Securities. "The old man may actually be tempted to sell down as the value has been inflated by several times."

CASH-OUT TIME?

Buffett and Bill Gates, the 55-year-old co-founder and chairman of Microsoft Corp, will arrive in China next Monday for a four-day visit, including three stops related to BYD in the cities of Beijing, Changsha and Shenzhen.

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