Warren Buffett’s Berkshire Hathaway has significantly reduced its stake in Activision Blizzard as Microsoft’s acquisition of the video game company nears completion. According to a new 13G filing released on Monday evening, the Omaha-based conglomerate now holds a 1.9% stake in Activision with 14,658,121 shares. This is a substantial decrease compared to the 6.3% stake it held at the end of March and the 6.7% stake at the end of 2022. The news of Microsoft’s $68.7 billion acquisition of Activision led to a surge of more than 9% in Activision’s shares last week after the Federal Trade Commission’s bid to block the deal was unsuccessful. Microsoft’s appeal against the block by U.K. regulators was granted a two-month pause on Monday. As of Monday’s close, Activision’s stock traded at $93.21 per share, slightly below Microsoft’s initial offer of $95 per share, announced in January 2022.
Buffett’s investment firm initially took a stake in Activision in late 2021, with the help of his investing lieutenants, Ted Weschler and Todd Combs, at an average cost of $77 per share. The move was part of a merger arbitrage strategy, speculating on the successful completion of Microsoft’s acquisition of the gaming company. Buffett and his longtime business partner, Charlie Munger, have been involved in merger arbitrage deals for the past five decades, a practice that used to be known as “workouts.”
