Buffett’s Berkshire Cuts Activision, Unveils New Homebuilder Bet

Max Reyes, Bloomberg News

(Bloomberg) -- Warren Buffett’s Berkshire Hathaway Inc. slashed its stake in Activision Blizzard Inc. by 70% during the second quarter amid the video-game maker’s prolonged effort to merge with Microsoft Corp. and disclosed a bet on the housing market.

The conglomerate also exited its position in insurance broker Marsh McLennan, and trimmed positions in other companies including Chevron Corp. Berkshire reported new holdings in homebuilders D.R. Horton Inc., NVR Inc. and Lennar Corp.

Berkshire was a net seller of equities during the three months ended June 30, divesting about $7.98 billion more of shares than it bought.

The largest US homebuilders have been outperforming smaller rivals, with stocks rallying and the companies welcoming an onrush of buyers frustrated by a severe shortage of existing-home listings.

Lennar, D.R. Horton and NVR are all up more than 30% this year.

Read More: Small US Homebuilders Are Being Squeezed Despite Rising Demand

Shares of Activision Blizzard have gained 19% this year, but the proposed deal with Microsoft has run into antitrust scrutiny, delaying the process. While Buffett, 92, plowed into the stock as a merger arbitrage play after the deal was announced, he has since pared his stake in the company.

Recent disclosures from Berkshire related to its stock portfolio revealed a departure from its long-held strategy of buying shares and holding them for the long term. Berkshire revealed a stake in Taiwan Semiconductor Manufacturing Co. last year, only to largely rotate out of that position in subsequent months.

Buffett said the decision to cut the stake was his, citing geopolitical tensions as the motivation behind the move even as he continued to praise the chipmaker.

“I feel better about the capital that we’ve got deployed in Japan than in Taiwan,” Buffett said at Berkshire’s annual meeting in May. “I wish it weren’t so, but I think that’s the reality, and I re-evaluated that in the light of certain things that were going on.”

(Updates home-builder performance in fourth paragraph, Activision Blizzard in sixth.)