Berkshire Hathaway Bought $1 Billion in Activision Blizzard Ahead of Microsoft Acquisition

Warren Buffett's conglomerate Berkshire Hathaway Inc. (BRK.B) bought a significant position in video game holding company Activision Blizzard Inc. (ATVI) in Q4 2021, according to a recent regulatory filing. The timing of the purchase positions Berkshire to record a sizable profit if Microsoft Corp. (MSFT) is successful in its efforts to buy Activision Blizzard.

Key Takeaways

  • Warren Buffett's Berkshire Hathaway bought roughly $1 billion in Activision Blizzard stock in Q4 2021.
  • Activision has faced a lawsuit alleging a sexist culture which has sent the company's stock price down.
  • Buffett's purchase came ahead of an announcement by Microsoft of its plans to acquire the video game company, which propelled Activision stock up by about 25%.
  • Berkshire could see a sizable profit if Microsoft's acquisition goes through.

Buffett's Successful Timing

Berkshire Hathaway submitted its Form 13F to the SEC today, which showed Berkshire Hathaway amassed an Activision Blizzard position totaling about 14.7 million shares worth close to $1 billion in the final months of 2021. Activision's stock tumbled late in the year to a low of $56.40 following a lawsuit by the California Department of Fair Employment and Housing which alleged that the company and subsidiaries fostered a sexist culture that underpaid female employees relative to male employees. The stock may have also been negatively impacted by lackluster reviews of the latest game in its popular Call of Duty franchise, released in November.

In Jan. 2022, tech titan Microsoft announced it planned to acquire Activision Blizzard for $68.7 billion at a price of $95 per share. This news helped to propel the video game developer's stock back up above $82 per share briefly. At a price of $95 per share, Berkshire's position in Activision Blizzard as of Q4 would be worth nearly $1.4 billion, marking a substantial profit.

Microsoft's acquisition of Activision Blizzard is expected to close in FY 2023.

Article Sources

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  1. Berkshire Hathaway Inc. "Form 13F." Accessed Feb. 15, 2022.

  2. CNBC. "Buffett’s Berkshire bought about $1 billion worth of Activision shares before Microsoft deal." Accessed Feb. 15, 2022.

  3. Microsoft Corp. "Microsoft to acquire Activision Blizzard to bring the joy and community of gaming to everyone, across every device." Accessed Feb. 15, 2022.

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