Is Buffett betting on Microsoft acquiring Activision Blizzard?

Buffett triples ownership of the gaming company, showing he’s confident the deal with MSFT will go through – Photo: Getty Images

Berkshire Hathaway CEO Warren Buffett is confident that Microsoft (MSFT) will complete the deal to buy Activision Blizzard (ATVI), as the billionaire continues to gobble up shares of the gaming company.

A new SEC filing shows Buffet’s Berkshire Hathaway Group tripled its ownership of ATVI stock despite market pessimism that regulators will approve Microsoft’s $68.7 billion takeover of Activision. Currently, Microsoft owns 9.5% of the video game company.

In total, Berkshire Hathaway acquired an additional four million shares of Activision Blizzard during the second quarter, bringing the total to 68.3 million shares.

Activision Blizzard (ATVI) stock price

Since announcing the deal in April, Activision’s stock price has risen about 2.84%, 2.72% in the past month and 0.22% in the past five days.

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Buffett confident MSFT will complete takeover

In an interview with Capital.com, Edward Moya, senior market analyst for OANDA in New York, said, “Warren Buffett didn’t shy away from his arbitrage merger bet with Activision Blizzard.”

“Each time Berkshire Hathaway increases their holdings with Activision stock, it indicates that they are increasingly confident that Microsoft will complete this acquisition,” he continued. “It’s a simple deal, and Microsoft shares should already be in the price of this deal.”

Microsoft stock price (MSFT)

Since Microsoft announced its intention to buy Activision in January for $95 per share, the company’s stock has fallen about 13.15%, but has risen 9.47% over the past three months and 12.54% last month.

What is Activision Blizzard?

ATVI produces games like Candy Crush and Call of Duty and is expected to accelerate Microsoft’s growth in games across a variety of platforms, including mobile, PC, console and cloud, while providing building blocks for the metaverse.

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