Why Warren Buffett’s Berkshire Is Buying Activision Shares

tipranks2022-05-02

Videogame developer Activision Blizzard (ATVI) has become a merger arbitrage bet for Warren Buffett’s Berkshire Hathaway (BRK.B) conglomerate. Activision agreed to be acquired by Microsoft (MSFT) in ...

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Pandachubby
2022-05-03
Pandachubby
Ok
DarkRaven
2022-05-03
DarkRaven
Ok
Onlyme
2022-05-03
Onlyme
Like plz
jere09
2022-05-03
jere09
[Miser]
xingyunblu
2022-05-02
xingyunblu
Thanks
Bspn
2022-05-02
Bspn
Ok

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Activision agreed to be acquired by Microsoft (MSFT) in ...</p>\n\n<a href=\"https://www.tipranks.com/news/why-warren-buffetts-berkshire-is-buying-activision-shares/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BRK.B","symbol_name":"伯克希尔B","start_time":0,"source_url":"https://www.tipranks.com/news/why-warren-buffetts-berkshire-is-buying-activision-shares/","article_id":"1104589761","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=1104589761","pubTimestamp":1651481984,"sourceInfo":{"source_id":"lsy1606183248679","name":"TipRanks"},"weMediaInfo":null,"summary":"Videogame developer Activision Blizzard (ATVI) has become a merger arbitrage bet for Warren Buffett’","collect":0,"end_time":0,"defaultTopTitle":"tipranks.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BRK.B":"伯克希尔B","ATVI":"动视暴雪","BRK.A":"伯克希尔"},"translate_title":"为什么沃伦·巴菲特的伯克希尔哈撒韦公司购买动视的股票","themeId":"","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"ATVI":0.9,"BRK.A":0.9,"BRK.B":0.9},"content_text":"Videogame developer Activision Blizzard (ATVI) has become a merger arbitrage bet for Warren Buffett’s Berkshire Hathaway (BRK.B) conglomerate. Activision agreed to be acquired by Microsoft (MSFT) in an all-cash transaction valuing it at $68.7 billion.At Berkshire’s 2022 annual shareholder meeting on April 30, Buffett revealed a stake of about 9.5% in Activision. The investment reflects a bet that the Microsoft-Activision deal will be completed. Activision shares closed at $75.60 on April 29, about 20% below Microsoft’s proposed buyout price of $95 per share. With Activision stock trading at a discount to Microsoft’s buyout offer, Buffett sees an arbitrage opportunity.“If the deal goes through, we make some money, and if the deal doesn’t go through, who knows what happens,” CNBC quoted Buffett as telling Berkshire shareholders.When Will the Microsoft-Activision Deal Close?Microsoft expects to close the Activision acquisition by July 2023. The deal needs to obtain regulatory approvals in the U.S., the EU, and other jurisdictions before it can be completed. Buffett told shareholders that he does not know what the regulators will do, but he knows that Microsoft has the money to complete the transaction.Microsoft expects the Activision acquisition to bolster its metaverse ambitions. It said that buying Activision would provide it with the metaverse building blocks. Investment bank Citigroup estimates that the metaverse economic opportunity could reach as much as $13 trillion by 2030.Activision Shareholders Give Their Blessing to the Microsoft DealActivision shareholders voted on April 28 to approve the Microsoft buyout deal. More than 98% of shareholders voted in favor of the transaction. However, Activision’s shares trading below the buyout price indicates that some investors doubt the deal will be completed.Wall Street’s TakeThe rest of the Street is cautiously optimistic about Activision stock with a Moderate Buy consensus rating based on six Buys versus three Holds. The average Activision Blizzard price target of $95.56 implies 26.4% upside potential to current levels. Shares have increased 12.8% year-to-date.Blogger OpinionsTipRanks data shows that financial blogger opinions are 90% Bullish on ATVI, compared to a sector average of 68%.Key TakeawaysThe arbitrage opportunity in Activision Blizzard looks attractive for investors buying the stock at the current levels. 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