FRI, JUL 21, 2023
Buffett cashes out most of his big bet on Microsoft's Activision deal
Warren Buffett isn't waiting for Microsoft to close its increasingly likely, but still somewhat uncertain, deal to buy Activision Blizzard for $95 per share.
At the May 2022 annual shareholders meeting, Buffett revealed he had purchased 50 million shares of the video game maker when they were trading around $80, well below the $95 Microsoft was offering. At the time, there were widespread concerns antitrust regulators would block the deal.
It was, in effect, a multi-billion dollar bet the acquisition would ultimately overcome any challenges and be finalized.
Last week, Activision shares rallied above $90 after a federal judge rejected the Federal Trade Commission's attempt to temporarily block the companies from completing the deal before it could be considered by a Federal Trade Commission administrative law judge.
Then, on Monday of this week, a Berkshire filing with the SEC revealed the company had sold 70% of the roughly 49 million shares, a 6.3% stake, it had reported holding as of the end of March.
(Berkshire's reported ATVI holdings peaked at 68.4 million shares, worth more than $5 billion, as of the end of last year's second quarter. Buffett's purchases were added to the 14.7 million shares that had been purchased by one of the company's portfolio managers in 2021, before Microsoft announced its offer. Buffett denied anyone had inside information about the bid.)
The July 17 filing has Berkshire owning just 14.7 million shares, a 1.9% stake, the same amount as it had before Buffett's big buys.
As Barron's notes, however, it doesn't detail exactly when the shares were sold or for how much.
It does indicate the stake fell below 5% as of June 30, so at least some of the sales did occur in the second quarter when Activision traded as high as $87.01 in late April and as low as $73.61 in early May.
But we don't know if any of the shares were sold after they rallied last week following the judge's ruling against the government.
Presumably, Buffett sold at some sort of profit, rather than risk going for the full $95 and potentially winding up with far less than he paid if the deal ultimately collapses.
On Wednesday, Microsoft and Activision agreed to extend the deadline for closing the merger until October 18 as the companies try to satisfy the concerns of regulators in the U.K.
And on Thursday, Bloomberg reported the FTC has paused its in-house trial on the deal, "opening the door to potential settlement talks" in the U.S.
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BERKSHIRE'S TOP U.S. STOCK HOLDINGS - Jul. 21, 2023
Berkshire's top holdings of disclosed publicly-traded stocks in the U.S., Japan, and Hong Kong, by market value, based on today's closing prices.
Holdings are as of March 31, 2023 as reported in Berkshire Hathaway’s 13F filing on May 15, 2023, except for:
The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker.
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