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Warren Buffet, Chairman and CEO of Berkshire Hathaway
Houston Cofield/Bloomberg
Berkshire Hathaway
reduced its stake in
ActivisionBlizzard
by 70% as
Microsoft
looks set to buy the video game maker.
In a Monday night filing, Berkshire Hathaway (ticker:
BRKB
) reduced its investment in Activision Blizzard (ATVI) to 14.7 million shares, according to a form filed with the Securities and Exchange Commission. Berkshire Hathaway held 49.4 million shares as of March 31, the most recent date.
The new filing was triggered by Berkshire Hathaway’s Activision shareholding falling below the 5% ownership threshold. The filing says Berkshire Hathaway now owns 1.9% of the company, down from 6% previously, but may have sold its entire stake in Activision. Once the ownership threshold falls below 5%, an investor is no longer required to disclose stock sales.
The filing does not indicate the exact period in which Activision shares were sold, or the price Berkshire Hathaway received. The filing says Berkshire Hathaway fell below a 5% stake as of June 30.
Activision stock rose 9% last week to $90 after a federal judge ruled that Microsoft (MSFT) could complete its merger with Activision, and Activision rose again on Monday after Microsoft reached an agreement to keep the Call of Duty video game franchise on
sony
(SNE) PlayStation consoles following the acquisition of Activision., a significant development from an anti-trust perspective.
Activision shares rose 3.5% on Monday to close at $93.21 as investors predicted the $75 billion deal could close soon. Microsoft has agreed to pay $95 per 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 the deal was unveiled due to the wide margin of arbitrage, reflecting concerns antitrust. He has been investing in arbitrage situations for over 60 years. Activision was trading in the $70s until recently, well below the buyout price of $95 per share. Buffett opined that the risk/reward ratio looked attractive.
Most of Activision’s stake was bought by Buffett and the rest by one of his two investment lieutenants, Ted Weschler or Todd Combs, who manage about 10% of Berkshire Hathaway’s stock portfolio.
Buffett spoke about the Activision outfit at Berkshire Hathaway’s 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 know is that Microsoft has the money. So that takes that risk away. Berkshire Hathaway had cut its stake in Activision from a high of 68 million shares in June 2022.
Write to Andrew Bary at andrew.bary@barrons.com