Berkshire Sale Sends Taiwan Semiconductor Stock Tumbling

Buffett also cut Activision stake amid regulatory scrutiny of Microsoft's acquisition

By
Nathan Reiff
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Nathan Reiff has been writing expert articles and news about financial topics such as investing and trading, cryptocurrency, ETFs, and alternative investments on Investopedia since 2016.
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Published February 15, 2023
Warren Buffett

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Key Takeaways

  • Berkshire Hathaway sold 86% of its stake in chipmaker Taiwan Semiconductor just months after first buying the stock.
  • Berkshire also trimmed its position in Activision Blizzard last quarter as the stock failed to rise to Microsoft's per-share offer.
  • The billionaire investor increased his position in Apple by more than 4 million shares.
  • Along with Apple, Louisiana-Pacific and Paramount Global were the only positions that increased relative to the third quarter.

Warren Buffett's Berkshire Hathaway Inc. (BRK.A) sent shares of Taiwan Semiconductor Manufacturing Co. Ltd. (TSM) plunging as much as 6% Wednesday morning after unexpectedly dumping most of its stake in the chipmaker just months after taking a position.

Berkshire sold more than 50 million shares of Taiwan Semiconductor in the fourth quarter, or 86% of the $4.1 billion position it opened just three months prior, according to its latest 13F form. The company owned only $618 million of Taiwan Semiconductor stock as of the end of 2022.

Berkshire's about-face, an unusual move for a firm known for its long-term investments, could signal trouble for Taiwan Semiconductor and other chipmakers. The semiconductor industry is still reeling from COVID-related supply chain issues, the lingering effects of China's long lockdown period, and inflation. Shares of competitors Qualcomm Inc. (QCOM), Advanced Micro Devices Inc. (AMD), and NVIDIA Corp. (NVDA) also retreated in early trading Wednesday.

Berkshire also sold about an eighth of its stake in video game maker Activision, jettisoning more than 7 million shares to leave it with about $4 billion invested in the company.

Berkshire began amassing its position in the video game maker in late 2021 as the stock tumbled to a one-year low of about $57 in the wake of sexual harassment allegations, but before Microsoft Corp. (MSFT) announced plans to buy the game developer for $95 per share. Activision shares have failed to achieve that price point since Microsoft's intention to purchase became public.

Microsoft's $69 billion purchase of Activision, which would be among the largest ever, hit obstacles in recent months as the U.S. Federal Trade Commission and other regulators have opposed the deal on anti-competitive grounds.

Buffett bought about 4.3 million Apple shares in the fourth quarter, bringing the value of Berkshire's stake in the company to more than $110 billion. Apple was one of just three positions that Buffett increased, alongside Paramount Global (PARA) and Louisiana-Pacific Corp. (LPX).

Article Sources
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  1. Berkshire Hathaway Inc. "FORM 13F INFORMATION TABLE: Nov. '22."

  2. Berkshire Hathaway Inc. "FORM 13F INFORMATION TABLE: Feb. '23."

  3. Yahoo! Finance. "Buffett’s Quick $3.7 Billion Sale of TSMC Stock Spooks Investors."

  4. Microsoft Corp. "Microsoft to acquire Activision Blizzard to bring the joy and community of gaming to everyone, across every device."

  5. Berkshire Hathaway Inc. "SEC Form 13F Information Table: Feb. '22."

  6. Yahoo! Finance. "Activision Blizzard, Inc. (ATVI)."

  7. Federal Trade Commission. "FTC Seeks to Block Microsoft Corp.’s Acquisition of Activision Blizzard, Inc."

  8. Markets Insider. "Warren Buffett's Berkshire Hathaway slashed 3 big stock bets last quarter - and topped up its huge Apple stake."

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