Warren Buffett refuted the notion that Berkshire Hathaway increased its almost 2% holding in Activision Blizzard last quarter in anticipation of Microsoft’s $75 billion attempt to buy the video-games behemoth in January.
On Thursday, the legendary investor and Berkshire CEO clarified the issue in a letter posted on his company’s website. He stated that one of his two portfolio managers, Todd Combs and Ted Weschler, was in charge of purchasing 14.7 million Activision Blizzard shares last quarter.
Buffett said his deputy created 85 percent of the stake in October and the balance in November at an average cost of $77 per share.
According to a Wall Street Journal storey published on Tuesday, Buffett wrote his letter to three journalists who stated Berkshire purchased Activision Blizzard shares for less than $67 on average. The millionaire claimed he alerted The Journal’s reporter to the inaccurate figure, and the piece was updated later that day. Berkshire Hathaway CEO Warren Buffett stressed that he and his staff had no prior knowledge of the Microsoft agreement when they bet into Activision Blizzard.
Buffett, a personal friend of Microsoft cofounder Bill Gates, said he would be shocked if Microsoft approached Activision about a prospective takeover as early as October.
Indeed, The Journal previously reported that Microsoft’s gaming leader, Phil Spencer, first approached Activision Blizzard CEO Bobby Kotick about a potential deal after the producer of “Call of Duty” and “World of Warcraft” stock dropped in November – just weeks after Berkshire began buying the stock.
After Microsoft announced the planned merger on January 18, the stock price of Activision Blizzard increased from around $65 to $82. On Thursday, it closed at $81, valuing Berkshire’s share at $1.2 billion, or less than $100 million above its cost base. Buffett pointed out that Activision Blizzard shares were as low as $78 in late January, so any investor could have gotten in at the same price as his deputy.
The 91-year-old, who is well-known for being concerned about his reputation and legacy, said that he was placing the letter on Berkshire’s site to “clear up any misinformation” and to “have the record right after I am no longer around.”
During the Daily Journal’s annual meeting this week, Buffett’s business colleague, Charlie Munger, was asked about the Activision Blizzard investment. He didn’t comment on the investment, but he did name CEO Bobby Kotick “one of the smartest business executives I know.”