The famous multibillionaire Warren Buffett has recently increased its stake in Activision 1.8% to 9.5% through Berkshire Hathaway Inc.
This is a move that makes it clear how Buffett is betting on the deal with Microsoft of 68.7 billion, which has yet to be finalized.
Well-known Bloomberg journalist Jason Schreier writes on Twitter:
“Warren Buffett revealed today that he has wagered a lot on Activision, increasing his stake from 1.8% to 9.5%. This is called merger arbitrage. Buffett is getting a discount on the stock, betting (against other investors) that the deal with Microsoft will go through.“.
“Warren Buffett is betting against the belief of other investors that the FTC could block the deal“.
From what emerged, therefore, Warren Buffett has decided to increase his stake by taking advantage of the decline in share prices up to $ 75.60. Previously, Microsoft agreed to buy the stock for $ 95 at the time the acquisition was announced.
Warren Buffett revealed today that he bet big on Activision, upping his stake from 1.8% to 9.5%. This is called a merger arbitrage play. Buffett is getting the stock at a discount, betting (against other investors) that the Microsoft deal will go through. https://t.co/Hn8wwfacI2 pic.twitter.com/qTYAZDXCta
– Jason Schreier (@jasonschreier) April 30, 2022
Put another way: Warren Buffett is betting against a belief held by other investors that the FTC could block the deal. Nobody knows what the outcome will ultimately be, but don’t let loud fanboys or YouTube pundits mislead you into thinking any of this is inaccurate.
– Jason Schreier (@jasonschreier) April 30, 2022
“If the deal is successful, we will earn a lot of money, and if it does not go through, who knows.“Buffett said.
What do you think?
Source: Reuters.
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