September 27, 2011 (Chinavestor) Warren Buffet backed Chinese battery and electric car maker, BYD Company (HKG:1211), surged 18.4% on Tuesday, its best daily advance in 2011. The stock was the best performing component of the Hang Seng Index (INDEXHANGSENG:.HSI) as a result.Investors wonder if this surge is going to be a trend or was it just a technical correction.
But not everything Warren Buffet touches turns gold. This Chinese company fell hard following a very disappointing first six months earnings. Sales for the first six months of the year fell over 10% while net income dropped 90% from a year ago. Additionally, BYD Company (HKG:1211) announced plans to fire 70% of its sales force at the end of August.
All told, the company has very serious fundamental problems, a reason for such a disappointing stock price performance. Today's 18.4% jump is considered a technical correction, or a dead cat bounce, and not the beginning of a fundamentally drive rally.