Berkshire Hathaway has increased its stake in Activision Blizzard
Investment holding company Berkshire Hathaway has closed a deal to buy shares in computer games developer Activision Blizzard. With this purchase, Warren Buffett’s company now owns securities worth a total of $5.6 billion.
It should be noted that Berkshire’s portfolio already has a 2% stake in the American company for a total value of $975 million. However, the management has decided to increase the share of the developer’s securities to 9.5%. Interestingly, the news of the purchase became known immediately after Microsoft announced the deal with Blizzard. According to representatives of Berkshire Hathaway, the supervisory authority, where the agreement between the IT giant and the developer is being reviewed, will approve the purchase. That said, the video game company’s shares are currently undervalued in the market. After the deal, the holding predicts that they will rise to $95 per unit. Therefore, while the deal has not officially been done, Berkshire Hathaway has decided to purchase the developer’s securities.
Earlier this year, the technology corporation Microsoft announced its purchase of Blizzard, with the deal valued at $69 billion. According to this figure, the developer’s securities were valued at $95 apiece. Such news triggered an increase in Blizzard’s quotations, but after a while, the value sank to $76 per share, which is significantly lower than the deal.
Berkshire Hathaway continues to actively invest in various areas. The holding company plans major investments in companies in Germany and Japan, but it is not yet specified which ones. Warren Buffett also stated the strategy that his company follows. One of the key principles is the delegation of responsibilities. To that end, Berkshire Hathaway has two managers who jointly control a $30 billion Buffett portfolio.
In addition to acquiring Blizzard shares, the holding almost six times increased its stake in the Chevron energy corporation. In addition, not long ago, Berkshire Hathaway bought HP securities, becoming an 11% stakeholder. Warren Buffett is now the largest shareholder of the American computer equipment manufacturer. The stake in Occidental Petroleum has also been increased.
Such major acquisitions have affected Berkshire Hathaway’s capital position, with cash down about 27% from $146 billion to $106 billion. In addition, the holding company recorded a 53% decline in profits for the first quarter of this year. However, according to analysts at Berkshire Hathaway, such a dip is temporary, and soon the figures will begin to grow. In the meantime, the holding company continues to actively invest in technology companies.
