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Berkshire Hathaway ATVI stock buy: Is Buffett betting on Microsoft’s Activision Blizzard acquisition going ahead?

00:00, 17 August 2022

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Warren Buffett
Buffett triples ownership in gaming company, showing confidence that MSFT deal will close – Photo: Getty Images

Berkshire Hathaway CEO Warren Buffett is confident Microsoft (MSFT) will close the deal to purchase 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 has tripled its ownership of ATVI stock despite the market's pessimism that regulators will approve Microsoft’s $68.7bn takeover of Activision. Currently, Microsoft owns 9.5% of the video gaming company.

In total, Berkshire Hathaway took on four million more shares of Activision Blizzard over the second quarter, bringing the total to 68.3 million shares.

Activision Blizzard (ATVI) stock price

Since the deal was announced in April, Activision's share price has risen roughly 2.84%, 2.72% the last month, and 0.22% the last 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 has not been shy about his arbitrage merger bet with Activision Blizzard.”

AMC

6.98 Price
-2.400% 1D Chg, %
Long position overnight fee -0.0308%
Short position overnight fee -0.0137%
Overnight fee time 21:00 (UTC)
Spread 0.08

NVDA

121.62 Price
-0.450% 1D Chg, %
Long position overnight fee -0.0064%
Short position overnight fee -0.0059%
Overnight fee time 21:00 (UTC)
Spread 0.24

TSLA

266.12 Price
-0.860% 1D Chg, %
Long position overnight fee -0.0308%
Short position overnight fee -0.0137%
Overnight fee time 21:00 (UTC)
Spread 0.14

AAPL

138.07 Price
-2.780% 1D Chg, %
Long position overnight fee -0.0064%
Short position overnight fee -0.0059%
Overnight fee time 21:00 (UTC)
Spread 0.05

“Each time Berkshire Hathaway increases their holdings with Activision shares, it signals they are growing more confident Microsoft will close on this acquisition,” he continued. “It’s a straightforward deal, and Microsoft shares should be pricing in this deal already.”

Microsoft (MSFT) stock price

Since Microsoft announced its intention to purchase Activision in January for $95 per share, the company stock has slipped roughly 13.15%, but is up 9.47% the last three months and 12.54% the last month.

What is Activision Blizzard?

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

 

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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