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Berkshire Hathaway revealed late last year that it had acquired almost a $1 billion in Activision Blizzard stake, which preceded the sale of the game maker to Microsoft in early 2022.
Berkshire Hathaway Inc (NYSE: BRK.A) bought almost $1 billion worth of Activision Blizzard Inc (NASDAQ: ATVI) shares before Microsoft Corp (NASDAQ: MSFT) agreed to purchase the video game company for $68.7 billion. This is according to a regulatory filing with the securities and exchange commission on Monday.
As of December 31st last year, Berkshire revealed that it owned 14.7 million Activision Blizzard shares worth $975 million. The Warren Buffett-led conglomerate revealed this in an end-of-year filing detailing its US-listed stock investments. Furthermore, Berkshire is expected to disclose more about its stock purchases, buybacks and cash on February 26th. This is when the Omaha-based company releases end-of-year results and Buffet’s widely-read annual shareholder letter.
Besides Berkshire, another prominent investor, Third Point Management, a hedge fund founded by Daniel Loeb, purchased 2 million Activision shares in Q4.
Given the date of the filings, it is unclear whether Buffett still owns the Activision shares. In addition, it also remains unclear whether the billionaire veteran investor or any of his investment deputies moved to invest in the “Call of Duty” maker. However, a known fact is that Buffett generally oversees larger investments at his firm.
Activision shares are up 23% this year to $81.50. However, this figure is still well below the game maker’s proposed $95 per share takeover price, reflecting potential antitrust concerns.
Following the Berkshire Development, Microsoft’s Acquisition of Activision Makes the Tech Company the Third-largest Gaming Company in the World
On January 18th 2022, Microsoft announced plans to buy Activision Blizzard in an all-cash deal, or approximately $95 per share. This deal represented Microsoft’s largest-ever acquisition so far. Furthermore, it also caused Activision Blizzard’s stock price to surge approximately 40% in pre-market trading shortly after the announcement. The deal stands to make Microsoft the third-largest gaming company in the world, and the largest with headquarters in the Americas. At present, it only trails Chinese company Tencent and Japanese powerhouse Sony in market cap.
For the deal, banking giant Goldman Sachs will serve as financial advisor to Microsoft, while Allen & Company will do the same for Activision.
Microsoft founder Bill Gates, who is a longtime friend of Buffet, ended his 16-year run on Berkshire’s board in 2020. While Gates was still serving in that capacity, Buffet reportedly avowed not to buy Microsoft shares due to potential conflicts of interests. Buffet himself had served as a trustee on the Bill and Melinda Gates Foundation up until his resignation in 2021.
In addition to acquiring Activision stock, Berkshire also altered its stake in the oil and gas and healthcare industries. For instance, the multinational holding company added to its stake in Chevron Corp (NYSE: CVX). Furthermore, Berkshire also reduced its holdings in health companies such as Bristol-Myers Squibb (NYSE: BMY), and Abbvie (NYSE: ABBV). Besides these, tech giant and consumer electronics powerhouse Apple (NASDQA: AAPL) remains Berkshire’s largest common stock holding.