Decoding Activision Blizzard’s Ownership: The 8.7% Stake Explained

The question of who holds significant sway over major corporations often sparks considerable interest, particularly when it involves a gaming giant like Activision Blizzard. Specifically, many are curious about the 8.7% ownership stake. The answer to this is clear: Warren Buffett’s conglomerate, Berkshire Hathaway (BKR), held 8.7% of Activision Blizzard’s shares, amounting to approximately 68.4 million shares, according to data from GuruFocus, making them the largest individual stockholder before the acquisition by Microsoft. However, it’s important to note that this information pertains to the ownership structure before the acquisition was finalized. With Microsoft’s acquisition of Activision Blizzard now complete, the ownership landscape has fundamentally shifted. This article will delve deeper into the specifics of Berkshire Hathaway’s previous ownership, the larger ownership picture of Activision Blizzard pre-acquisition, and what the Microsoft deal means for the company’s future.

Berkshire Hathaway’s Investment: A Closer Look

Buffett’s Bet on Gaming

Warren Buffett, the legendary investor, often makes headlines with his investment choices. His firm, Berkshire Hathaway, acquiring a substantial stake in Activision Blizzard was certainly one of them. This decision reflects a departure from his traditional investment strategies, traditionally focusing on more predictable sectors. However, the potential of the gaming industry, and specifically Activision Blizzard’s prominent position within it, likely piqued his interest. Berkshire Hathaway initially amassed a significant position, becoming the top individual shareholder before the Microsoft acquisition.

Changes in Berkshire’s Holding

While Berkshire Hathaway was a major shareholder, it’s crucial to understand that the company did not retain its full stake until the merger. In its 13F filing, Berkshire Hathaway disclosed they had significantly reduced their Activision Blizzard holdings, selling off over two-thirds of their position. This highlights the dynamic nature of institutional investing and demonstrates that even the most significant positions can change rapidly. The decision to sell prior to Microsoft’s final acquisition was likely influenced by a variety of factors, including the impending merger and their individual investment strategy. Despite selling a large portion, the remaining stake yielded a profit for the investment conglomerate.

Understanding the Pre-Acquisition Ownership Structure

Beyond Berkshire Hathaway

While Berkshire Hathaway was the largest individual stockholder with their 8.7% stake, several institutional investors collectively held the vast majority of Activision Blizzard’s stock. These major shareholders included firms like:

• FMR LLC
• BlackRock Inc.
• Vanguard Group Inc.
• State Street Corp.
• Capital World Investors
• Janus Henderson Group Plc
• Lone Pine Capital LLC
• Jennison Associates LLC
• Morgan Stanley
• Invesco Ltd.

These institutions held a total of 654,470,452 shares, demonstrating how broadly held the company’s stock was before the Microsoft acquisition. It highlights that, while individual stockholders like Berkshire Hathaway can have significant sway, the influence of large institutional investors cannot be ignored.

The Saudi Arabian Public Investment Fund

Another notable individual stakeholder was the Public Investment Fund of Saudi Arabia, which held a 4.8% stake. This shows the global reach of Activision Blizzard’s stock and the diverse range of investors who believed in its potential.

The Impact of Microsoft’s Acquisition

A New Era for Activision Blizzard

The $69 billion acquisition of Activision Blizzard by Microsoft completely transformed the ownership landscape of the company. With the deal now closed, Activision Blizzard is a subsidiary of Microsoft. This move consolidates significant gaming assets under Microsoft’s umbrella, positioning them to compete even more aggressively in the gaming market.

What Happened to ATVI Stock?

Prior to the acquisition closing, shareholders of ATVI (Activision Blizzard’s stock ticker symbol) were set to receive $95.00 in cash for each share they held on October 12, 2023. This caused the stock to trade at a price below the $95 merger price as investors accounted for the risk the deal would not go through. The acquisition was finalized on October 13, 2023, and ATVI was delisted and is no longer publicly traded. This means that ATVI shareholders are now cashed out at the $95 per share level.

No More Public Trading

With the acquisition complete, ATVI stock is no longer traded on public exchanges. The company is now a wholly-owned part of Microsoft, which has absorbed Activision Blizzard and its portfolio of games. The merger marked the end of an era for Activision Blizzard as an independent entity and the start of its integration within Microsoft.

Frequently Asked Questions (FAQs)

Here are 15 frequently asked questions about Activision Blizzard’s ownership and the Microsoft acquisition, designed to provide a more complete understanding:

1. Who is the current owner of Activision Blizzard?
   Activision Blizzard is now a wholly-owned subsidiary of Microsoft, following the completion of the acquisition on October 13, 2023.

2. What was the buyout price for Activision Blizzard shares?
   Microsoft paid $95 per share for all outstanding Activision Blizzard shares.

3. Did Warren Buffett profit from his Activision Blizzard investment?
   Yes, although he sold a large portion of his holding before the acquisition was finalized, the sale still netted Berkshire Hathaway a 24% profit on the stake.

4. Why was there a discrepancy between the trading price of ATVI and the $95 buyout price?
   The difference was due to the market accounting for the possibility that regulatory hurdles might block the Microsoft acquisition.

5. Did Microsoft encounter any obstacles in acquiring Activision Blizzard?
   Yes, the Federal Trade Commission (FTC) initially blocked the merger due to antitrust concerns, but Microsoft ultimately succeeded after legal battles and approvals.

6. What happened to the ATVI ticker symbol after the merger?
   The ATVI ticker symbol was delisted from stock exchanges following the completion of the Microsoft acquisition.

7. Who owns Call of Duty?
   Activision, a subsidiary of Microsoft, owns the Call of Duty franchise.

8. Does Blizzard own Activision, or does Activision own Blizzard?
   Activision and Blizzard merged in 2008 to become Activision Blizzard. Now, both are under Microsoft’s ownership.

9. What was Activision Blizzard’s net worth before the acquisition?
   Activision Blizzard’s final net worth before the delisting was $74.051 billion as of June 30, 2023.

10. What happens to Activision Blizzard’s game franchises like World of Warcraft and Candy Crush now?
    These franchises are now owned and operated by Microsoft, under the Activision Blizzard subsidiary.

11. Why did Microsoft acquire Activision Blizzard?
    Microsoft acquired Activision Blizzard to expand its gaming presence and enhance its competitiveness in the video game market.

12. Will Xbox own Activision?
    Yes, Activision Blizzard is now a subsidiary of Microsoft, which also owns the Xbox gaming system.

13. How much did Microsoft pay in total for Activision Blizzard?
    Microsoft paid approximately $69 billion to acquire Activision Blizzard.

14. What did the merger mean for ATVI shareholders?
    Shareholders received $95 in cash per share held at the close of trading on October 12, 2023 and the stock was delisted.

15. Was Berkshire Hathaway the only major shareholder of Activision Blizzard?
    No. While Berkshire Hathaway was a significant shareholder, many institutional investors held even larger amounts of the company’s stock before the acquisition.

This acquisition marks a major shift in the gaming landscape, with Activision Blizzard now operating under the massive umbrella of Microsoft.