Warren Buffett Responds To Speculations Surrounding Berkshire's $1B Stake In Activision And Microsoft Deal

Berkshire Hathaway Inc (NYSE: BRK-A) (NYSE: BRK-B) chairman and CEO Warren Buffett on Thursday adamantly denied that he or his colleagues at the investment firm had advanced knowledge of Microsoft Corp’s MSFT plan to buy Activision Blizzard Inc ATVI.

What Happened: The veteran value investor told the New York Post that he wanted to clear up “misinformation” about the $1 billion transaction, in which his investment firm bought shares in Activision Blizzard in the fourth quarter of 2022.

Berkshire’s firm disclosed earlier this week that it had bought 14.66 million shares, valued at $975 million, in Activision Blizzard between October and November 2021, just weeks before Microsoft bought the company for $68.7 billion.

The revelation gave rise to speculations and rumors on social media, given Buffett’s close friendship with Microsoft co-founder Bill Gates — who had in March 2020 stepped down from Berkshire’s board.

See Also: Berkshire Hathaway Bought $1B Worth Activision Blizzard Stock Before Microsoft Lapped It Up

“To sum up the facts, it was about three months after our manager’s first purchase that Microsoft announced its acquisition proposal of which Berkshire had no prior knowledge,” Buffett reportedly told the Post.

“When Microsoft files its proxy material on its proposed purchase of Activision, I would be surprised if they had even discussed a proposal with Activision in early October, although I do not know.”

Why It Matters: Buffett said the Berkshire investor made the bulk of the buys in October and bought another 15% more shares in November, at an average cost of about $77.

Microsoft announced its plan to acquire Activision Blizzard in mid-January for $95 per share.

The buys could fetch Berkshire a good profit, subject to Microsoft closing the deal.

Activision shares got hammered in the fourth quarter following allegations of sexist culture and pay discrimination between men and women.

Price Action: Activision-Blizzard shares closed 0.6% lower at $80.97 a share on Thursday and is up more than 24% since the deal was announced.

See Also: Microsoft To Acquire Activision In $68.7B Deal: What Investors Need To Know

Photo: Courtesy of Fortune Live Media via Flickr