As Microsoft’s acquisition of the video game firm neared completion, Warren Buffett’s Berkshire Hathaway sold off a sizable amount of its Activision Blizzard holdings.
A new 13G filing made public on Monday night revealed that the company with headquarters in Omaha, Nebraska, owned 14.658,121 shares in Activision, representing a 1.9% ownership. Comparatively, there were 6.3% and 6.7% stakes at the end of March and 2022, respectively.
Following the Federal Trade Commission’s failure to stop Microsoft‘s $68.7 billion acquisition of the video game publisher, Activision stock climbed more than 9% last week. A two-month stay was granted for Microsoft’s appeal against the UK authorities’ block on Monday.
The stock’s closing price on Monday was $93.21. Microsoft revealed plans to acquire Activision in January 2022 for $95 per share.
The “Oracle of Omaha” previously disclosed that Ted Weschler and Todd Combs, two of his investment lieutenants, purchased their first Activision shares in October and November 2021 for, on average, $77 a share.
After wagering that Microsoft’s proposed acquisition of the video game firm would go through, the 92-year-old investment veteran increased his position in a merger arbitrage play.
Buffett said that he and Charlie Munger, his longstanding business partner, began engaging in merger arbitrage transactions more than 50 years ago, back when such transactions were known as “workouts.”
“Every now and then I see something that I want to do in that field [merger arbitrage], but very seldom because they’ve got to be big,” Buffett told investors at Berkshire’s annual meeting last year. “The profit is limited. If they say you’re going to get $95, you’re not going to get $96, and if the deal blows up you may have a stock that’s at $40.”
Buffett remarked at the annual meeting, “If the deal goes through, we earn some money, and if the deal doesn’t go through, who knows what happens.
Activision Blizzard’s CEO claims that if the UK rejects the Microsoft acquisition, it will suffer.
Bobby Kotick is the Activision Blizzard CEO.
Not all of Berkshire’s investments were reduced in the third quarter, including Activision. The Omaha, Nebraska-based business, which had just a few months previously invested $4.1 billion worth of shares in Taiwan Semiconductor Manufacturing, liquidated more than 85% of that holding.
Berkshire disclosed it possessed 8.3 million shares worth $618 million, a reduction in its stake in TSMC of more than 50 million shares. The quick change is rare for Berkshire, which often thinks about
