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Warren Buffet, chairman and CEO of Berkshire Hathaway
Houston Cofield/Bloomberg
Berkshire Hathaway
has reduced its stake in
Activision Blizzard
by 70% as
Microsoft
seems poised to buy the maker of video games.
In a filing late Monday, Berkshire Hathaway (ticker:
BRKb
) reduced its investment in Activision Blizzard (ATVI) to 14.7 million shares, according to a form it filed with the Securities and Exchange Commission. Berkshire Hathaway had held 49.4 million shares on March 31, the most recently reported date.
The new filing was triggered by Berkshire Hathaway’s Activision stock ownership falling below the 5% ownership threshold. The filing indicates Berkshire Hathaway now owns 1.9% of the company, down from 6%, but it may have sold its entire Activision stake. Once the ownership threshold falls below 5%, an investor is no longer obligated to disclose stock sales.
The filing doesn’t indicate the exact time frame of when the Activision shares were sold, or the price that Berkshire Hathaway received. The filing does indicate that Berkshire Hathaway dropped below a 5% stake as of June 30.
Activision stock rallied 9% last week to $90 after a federal judge ruled that Microsoft (MSFT) could close on its merger with Activision, and Activision was up again Monday after Microsoft reached a deal to keep the Call of Duty videogame franchise on
Sony
(SNE) PlayStation consoles following the acquisition of Activision., an important development from an anti-trust perspective.
Activision shares rose 3.5% Monday to close at $93.21 as investors anticipate that the $75 billion deal could close soon. Microsoft agreed to pay $95 a share in cash for Activision in a transaction announced in early 2022.
Berkshire Hathaway CEO
Warren Buffett,
92, invested in Activision to take advantage of the arbitrage opportunity that arose after deal was unveiled because of the wide arbitrage spread, a reflection of antitrust concern. He has been investing in arbitrage situations for over 60 years. Activision has been trading in the high $70s until recently, way below the $95-a-share takeover price. Buffett’s view was that the risk/reward looked attractive.
Most of the Activision holding was bought by Buffett and the rest by one of his two investment lieutenants, Ted Weschler or Todd Combs, who run about 10% of Berkshire Hathaway’s equity portfolio.
Buffett spoke about the Activision holding at the Berkshire Hathaway annual meeting last year, saying “We don’t know what the Justice Department will do. We don’t know what…30 other jurisdictions” will do. “One thing we do know is Microsoft has the money. So that takes that one risk out of it.” Berkshire Hathaway had cut its Activision stake from a high of 68 million shares in June 2022.
Write to Andrew Bary at andrew.bary@barrons.com
