MSFT - Should You Follow Warren Buffett's Lead and Buy Activision Blizzard Stock?
Nearly a year ago, Microsoft (NASDAQ: MSFT) announced its intentions to purchase Activision Blizzard (NASDAQ: ATVI) for $95 per share. Considering Activision shares are currently trading for roughly $77, there is an implied 23% upside here. It doesn't take a genius to realize there's money to be made here. This type of action is called arbitrage, which means purchasing an asset at a discount to its buyout price to flip it when it reaches its full potential.
Warren Buffett's Berkshire Hathaway got in on this opportunity earlier this year, and the company currently holds a 7.7% stake in Activision (roughly 1.4% of Berkshire's investment portfolio).
Following Buffett's lead and buying the stock with a tangible 23% short-term upside seems too good to be true. But is it?
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Should You Follow Warren Buffett's Lead and Buy Activision Blizzard Stock?