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Buffett's Berkshire boosts Ally, Activision holdings; sheds Verizon

Published 08/15/2022, 04:46 PM
Updated 08/15/2022, 09:41 PM
© Reuters. FILE PHOTO: The logo and trading information for Ally Financial Inc appear on a screen on the floor at the New York Stock Exchange (NYSE) in New York, U.S., April 24, 2019. REUTERS/Brendan McDermid
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By Jonathan Stempel

(Reuters) -Berkshire Hathaway Inc, run by billionaire Warren Buffett, has tripled its stake in online banking company Ally Financial (NYSE:ALLY) Inc and increased its bet that "Call of Duty" video game maker Activision Blizzard Inc (NASDAQ:ATVI) will be acquired by Microsoft Corp (NASDAQ:MSFT).

In a Monday regulatory filing describing its U.S.-listed equity investments as of June 30, Berkshire also said it exited what was once an $8.3 billion investment in Verizon Communications Inc (NYSE:VZ) and no longer owns Royalty Pharma Plc, which buys drug royalties.

The filing does not specify whether Buffett or his portfolio managers Todd Combs and Ted Weschler made specific purchases and sales, but investors often try to mimic what Berkshire does. Larger investments are normally Buffett's.

Berkshire slowed its stock buying spree in the second quarter as U.S. stock markets fell, purchasing $6.2 billion of stocks and selling $2.3 billion. It had bought $51.1 billion and sold $9.7 billion in the first quarter.

Nevertheless, Buffett's conglomerate, which also owns dozens of businesses such as the BNSF railroad and Geico auto insurer, ended June with a $327.7 billion equity portfolio, led by $125.1 billion in Apple Inc (NASDAQ:AAPL).

It also invested more than $33 billion in two oil companies, Chevron Corp (NYSE:CVX) and Occidental Petroleum Corp (NYSE:OXY), as oil prices surged following Russia's invasion of Ukraine.

Berkshire has since purchased another $1.7 billion of Occidental stock, boosting its stake to 20.2%. It also owns $10 billion of Occidental preferred stock.

In the second quarter, Berkshire's Ally stake grew to 30 million shares from about 9 million, while its Activision stake grew to 68.4 million shares, worth $5.3 billion, from 64.3 million.

The Activision investment is a form of arbitrage, where Buffett appears to be betting that investors are pessimistic that regulators will approve Microsoft's proposed $68.7 billion takeover of the company.

© Reuters. FILE PHOTO: The logo and trading information for Ally Financial Inc appear on a screen on the floor at the New York Stock Exchange (NYSE) in New York, U.S., April 24, 2019. REUTERS/Brendan McDermid

According to Monday's filing, Berkshire also increased its holdings during the second quarter in Apple, Celanese (NYSE:CE) Corp, Chevron, Markel (NYSE:MKL) Corp, McKesson Corp (NYSE:MCK), Occidental and Paramount Global.

It reduced its holdings in General Motors Co (NYSE:GM), Kroger (NYSE:KR) Co, Store Capital (NYSE:STOR) Corp and US Bancorp (NYSE:USB), the filing shows.

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