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Warren Buffett’s Berkshire Hathaway reveals $1 billion stake in Activision Blizzard

Warren Buffett.

CNBC/YouTube

  • Warren Buffett’s Berkshire Hathaway built a major stake in Activision Blizzard last quarter.
  • The investor’s company purchased nearly 15 million shares, worth about $1.2 billion today.
  • Microsoft struck an all-cash deal in January to acquire Activision Blizzard for $69 billion.

Warren Buffett’s Berkshire Hathaway built a billion-dollar stake in Activision Blizzard last quarter, before Microsoft agreed to acquire the video-games giant in January this year.

The famed investor’s company purchased 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, a Securities and Exchange Commission filing revealed on Monday.

Microsoft agreed to acquire Activision Blizzard in an all-cash deal for $69 billion in January, helping to propel the video-game company’s stock price up 21% this year, and boosting the value of Berkshire’s stake to $1.2 billion today.

If Microsoft wins regulatory approval for its $95-per-share offer for Activision Blizzard, Berkshire’s stake would be worth $1.4 billion. Buffett may be pleased by the all-cash terms of the deal, as he’s avoided buying Microsoft stock for Berkshire given he’s best friends with Bill Gates and doesn’t want to raise suspicions that he’s acting on inside knowledge.

Buffett’s company made several other changes to its portfolio. For example, it slashed its AbbVie and Bristol-Myers Squibb stakes by nearly 80%, trimmed its Charter and Visa holdings, and sold its position in Teva Pharmaceuticals. It also disclosed a $1 billion stake in Nubank following the Brazilian lender’s stock-market debut in December.

Berkshire owns scores of businesses including See’s Candies and Geico, and holds multibillion-dollar stakes in Apple, Coca-Cola, and other public companies. It also boasted $149 billion in cash and short-term investments at the end of September.

Buffett has been itching to deploy a chunk of Berkshire’s cash on a big stake in a public company or an elephant-sized acquisition for years. However, he’s struggled to find bargains with stocks near record highs, and private equity firms and SPACs pushing up the prices of businesses.

In the absence of any great deals, Buffett has plowed billions of dollars into stock buybacks. In fact, his company is expected to reveal in its annual report later this month that share repurchases topped a record $25 billion in 2021.

Read more: Warren Buffett is ready to deploy $80 billion if the market crashes this year. 7 experts lay out why the investor should trim his Apple stake, acquire luxury brands, or buy some blue-chip stocks in the meantime.

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