Buffett says hes been buying Activision shares since Microsoft deal, now owns 9.5% of company

Chairman and CEO Warren Buffett and Vice Chairman Charlie Munger preside over the Berkshire Hathaway annual meeting, nicknamed the “Woodstock for Capitalists.” The Omaha, Nebraska, event gives shareholders a chance to hear the legendary pair discuss investing, their economic outlook and life. For access to live and exclusive video from CNBC subscribe to CNBC PRO:

All right i should make a little news here so uh uh you’ve come you’ve all come and uh you may or may not see this but it’s very possible uh one of the things we bought one of things i bought it was bought for a different purpose by a different manager months earlier uh he bought roughly 15 million shares of activision and i never paid i knew about the company

But i would just see it at the monthly report but then on january i don’t know 17th or 18th something like that microsoft announced they were going to buy activision for 95 a share now when they announced that at that point activision becomes a different kind of security it becomes what charlie and i used to call uh well everybody didn’t 50 years ago uh we

Call them workouts or something like that and they become known as arbitrage well they’re not really arbitrage but their their securities are those kinds of common stock whose value depends not on what the market price does but whether a given corporate event occurs an announced corporate event occurs well microsoft wants to buy activision let’s say well they

Said at 95 a share and they’ve got the money and obviously mergers and big mergers tech companies all kinds of things i’ve got all kinds of problems uh with the world generally in terms of opinion so you don’t know what the justice department will do you know or you don’t know what the eu will do and all kinds of things but at that point it becomes a different

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Security and charlie and i uh 50 years ago we used to do a lot of that sort of thing and uh and we and dust levy did it at goldman sachs and we even went back one time i think on british columbia power didn’t we truly yeah a guy named bennett was up there and we were trying to figure out whether some some uh takeover of the power business i mean we spent a

Lot of time analyzing the probabilities of announced deals going through and we call them workouts now the turn became arb and it hasn’t worked work overall too well in recent years now every now and then i see something that i want to do in that field and but very seldom because they got to be big the profit is limited you know if they say you’re going to get

95 you’re not going to get 96 and you may the deal blows up you may have a stock that’s at 40 or something so it’s a but we did it with uh monsanto five or six years ago uh when bear was buying it and we got very lucky because it turned out to be a terrible acquisition for bear but but it it did go through because bear had the money and they they went through

The deal even though monsanto came with a problem that nobody uh really understands so the extent of and we did it with red hat when ibm bought it so in any event on september whatever i mean on january whatever it was 17th 18th 19th microsoft announces it and the stock which had been that’s 60 let’s see what it i may have a slide here which i’ll find but in

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Any of the stock which had been in the 60s uh uh went up to the 81 or two and that looked like not a big enough spread to me for a few days and then it settled back a little so anyway we now own uh nine and a half percent not something like nine and a half percent of activision if we went over 10 we would file a report so uh in order that the news people

Don’t feel that there’s no news there i can tell you that as of uh yesterday well about nine and a half percent if we go past 10 there’ll be a form file with the fcc and so on but it is it is a it is my purchases not the manager who bought it some months ago uh and uh if if the deal goes through we make some money and if the deal doesn’t go through who knows what happens

Transcribed from video
Buffett says he's been buying Activision shares since Microsoft deal, now owns 9.5% of company By CNBC Television