Getty Images / Bill Pugliano
- Warren Buffett has boosted Berkshire Hathaway’s stake in Activision Blizzard.
- The investor revealed he’s grown the position from about 2% to 9.5%.
- Buffett is betting Microsoft’s deal to buy the business will be approved, boosting the stock price.
Warren Buffett’s Berkshire Hathaway has boosted its stake in Activision Blizzard from 2% to 9.5%, the investor revealed during his company’s annual shareholder meeting on Saturday.
Buffett explained that while one of his portfolio managers established the stake in the video-games maker last year, months before Microsoft agreed to acquire the company, he had since decided the stock was too far below the deal price, and decided to boost Berkshire’s position.
The Berkshire chief said he wanted to make some news, and head off any incorrect news stories if Berkshire raises its position to over 10%, and has to disclose the position with the SEC.
“Every now and then I see something that I want to do in that field,” Buffett said, referring to “work-outs” or arbitrage opportunities. The investor is betting the deal will be approved by regulators, and Activision Blizzard stock will rise to the deal price, generating a profit for Berkshire.
“It is my purchase, not the manager who bought it some months ago,” Buffett emphasized. “If the deal goes through, we make some money.”
Berkshire previously bought 14.7 million shares of the “Call of Duty” and “World of Warcraft” studio, giving it an almost 2% stake worth $975 million at the end of December, filings show. A 9.5% stake is worth about $5.6 billion, based on Activision Blizzard’s closing stock price on Friday.
Microsoft agreed to acquire Activision Blizzard in an all-cash deal for $69 billion in January, propeling the video-game company’s stock price upward. Activision Blizzard stock closed below $76 on Friday, well below Microsoft’s offer of $95 a share.
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