Berkshire owns 9.5% of Activision Blizzard shares in merger arbitrage bet
Warren Buffett, Saturday Berkshire Hathawayis increasing its stake Activision BlizzardIn a merger arbitrage game, you can bet that Microsoft’sThe proposed acquisition of this videogame company will be completed.
Buffett stated that Berkshire currently owns 9.5% of Activision shares.
Berkshire’s CEO and chairman said that “occasionally I will see an arbitrage agreement and make it,”. Although it may appear that the odds favor us, we could lose money on the company. It all depends on how the deal ends.
Microsoft will launch its January 2008 campaign announced intentions to buy ActivisionFor $95 per share Activision closed Friday at $75.60 per Share
Buffett claimed that he’s been buying more Activision stock shares ever since the acquisition was made, as Activision is currently trading at much less than Microsoft. These levels of buying will give you more return, if the deal goes through.
Buffett explained, “If the deal is successful, we will make some money. If it fails, who knows what’s going to happen?”
“We are not sure what the Justice Department will do. We don’t know how the EU will act. And we don’t know what other jurisdictions will do. He said that Microsoft does have the cash, but one thing is certain.
Berkshire purchased Activision Blizzard stock for about $1 billion in the fourth quarter of 2021. It was a wager that the company was too undervalued.
Buffett said Berkshire “had no prior knowledge”Microsoft bought the company in a plan that Berkshire had originally invested.
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