Activision Blizzard Inc (NASDAQ:ATVI) shares are trading higher Monday morning after Warren Buffett said Berkshire Hathaway has built about a 9.5% stake in the video game company.
Microsoft Corp (NASDAQ:MSFT) announced an agreement to buy Activision for $95 per share at the beginning of the year. With the stock trading well below $95, Buffett, on Saturday, announced Berkshire has been increasing its stake in a merger arbitrage play, betting that the deal will close.
"Occasionally I’ll see an arbitrage deal and do it," Buffett said during Berkshire's annual shareholder meeting. "Occasionally it looks like the odds are in our favor, but absolutely we can lose money."
Activision closed Friday at $75.60 per share, about $20 below the proposed acquisition price.
"If the deal goes through, we make some money, and if the deal doesn’t go through, who knows what happens,” Buffett said.
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ATVI Price Action: Activision has traded between $56.40 and $99.45 over a 52-week period.
According to data from Benzinga Pro, the stock was up 2.57% at $77.54 at press time.
Photo: Tarcil Tarcil from Flickr.
