Berkshire “had no prior knowledge” of Microsoft’s plans to acquire Activision
Warren Buffett has refuted the idea that Berkshire Hathaway increased its stake in Activision Blizzard by nearly 2% last quarter ahead of Microsoft’s $75 billion bid to buy the gaming giant in January.
On Thursday, the legendary Berkshire investor and CEO clarified the matter in a letter posted on his company’s website. He said one of his two portfolio managers, Todd Combs and Ted Weschler, was in charge of buying 14.7 million Activision Blizzard shares last quarter.
Buffett said his deputy created 85% of the stake in October and the balance in November at an average cost of $77 per share.
According to a Wall Street Journal article published Tuesday, Buffett wrote his letter to three reporters who said Berkshire bought Activision Blizzard stock for less than $67 on average. The millionaire claimed to have alerted the Journal reporter to the inaccurate figure, and the article was updated later that day. Berkshire Hathaway CEO Warren Buffett pointed out that he and his staff had no prior knowledge of the Microsoft deal when they bet on Activision Blizzard.
Buffett, a personal friend of Microsoft co-founder Bill Gates, said he would be shocked if Microsoft approached Activision about a possible takeover as early as October.
Indeed, The Journal previously reported that Microsoft gaming leader Phil Spencer first approached Activision Blizzard CEO Bobby Kotick about a potential deal after the producer of the “Call of Duty” and “World of Warcraft” dropped in November – just weeks after Berkshire debuted. buy the shares.
After Microsoft announced the planned merger on January 18, Activision Blizzard’s stock price rose from around $65 to $82. On Thursday, it closed at $81, valuing Berkshire’s share at $1.2 billion, less than $100 million above its cost base. Buffett pointed out that Activision Blizzard shares were as low as $78 at the end of January, so any investor could have entered at the same price as his deputy.
The 91-year-old, who is well known to be concerned about his reputation and legacy, said he was placing the letter on the Berkshire site to ‘dispel any misinformation’ and to ‘have the file right after I no longer be around.”
At the Daily Journal’s annual meeting this week, Buffett’s business colleague Charlie Munger was asked about the Activision Blizzard investment. He did not comment on the investment, but he named CEO Bobby Kotick “one of the smartest corporate executives I know.”