Buffett's Berkshire Bought About $1 Billion Worth of Activision Shares Before Microsoft Deal

Gerald Miller | CNBC
  • Warren Buffett's Berkshire Hathaway jumped into Activision Blizzard after a state lawsuit alleging a sexist culture at the game publisher sent the stock price down.
  • Microsoft announced its intention to buy Activision Blizzard in mid-January for $68.7 billion.
  • Buffett is poised to notch a handsome profit if the acquisition closes.

Warren Buffett's Berkshire Hathaway purchased about $1 billion worth of shares in Activision Blizzard in the fourth quarter, according to a regulatory filing, jumping in before Microsoft agreed to buy the video game publisher for $68.7 billion.

Berkshire owned 14.66 million shares valued at $975 million as of the end of 2021, the filing shows.

Microsoft announced its intention to acquire Activision Blizzard in mid-January for $95 per share, sending the stock up 25% to above $82, though it's since fallen a bit. It would be the largest deal ever by a U.S. technology company.

"Berkshire had no prior knowledge" of Microsoft's plan to acquire Activision Blizzard, Buffett wrote in a letter that a representative sent to reporters on Thursday.

One of two investment managers who operate independent of Buffett bought shares of Activision Blizzard, buying about 85% of the position in October and the remainder in November, with an average cost of $77 per share, Buffett wrote.

"In any event, the investment manager's $77 per share purchase could have been replicated after the Microsoft proposal was announced at a price of $78 or so," Buffett wrote. "His purchase was no bonanza of any sort for him or Berkshire."

Buffett is poised to notch a handsome profit should the acquisition close. The stock reached as low as $56.40 in the fourth quarter after the California Department of Fair Employment and Housing filed a suit alleging that Activision and its subsidiaries fostered a sexist culture and paid women less than men.

Activision also said in November that it was delaying the releases of Diablo IV and Overwatch 2. And it was hit with disappointing reviews of its new game Call of Duty: Vanguard, released the same month.

Bill Gates, co-founder and former CEO of Microsoft, stepped down from the boards of Berkshire and Microsoft in 2020. Gates is a longtime friend of Buffett, Berkshire Hathaway's chairman and CEO. They rank fourth and sixth, respectively, among the world's richest people, according to Forbes.

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