It is difficult for an ongoing business (or an investor) to go bankrupt without debt.
- Manlobbi
Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤
No. of Recommendations: 7
I closed out my Activision trade yesterday. I purchased two equal sized investments, one in early May 2022 and the other in late November 2022 - here is how it worked out.
ATVI : +21.2%
SPY : + 9.5%
BRK : + 7.6%
TBH I am glad to be out of this trade - I learn't I don't like arbitrage.
tecmo
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No. of Recommendations: 2
An acquisition with twists and turns to be sure. I bought ATVI mostly before the acquisition when it was trading a very low levels. Then MSFT announced the acquisition and BRK acquired additional shares. So I have basically been treating ATVI as a cash alternative -- unlikely to go down since the acquisition seemed solid, but with attractive upside since the market seemed to be pricing it at a big discount to the $95/share acquisition price. So over the last 1.5 years, it grew into my single largest position because I basically stuffed any dividend payments and extra cash I would get into my account into ATVI. Seemed like a good risk/reward.
Then the UK came out with their decision and it didn't seem like such a sure thing anymore. It still felt safe in the sense that ATVI wasn't trading at a particularly rich valuation for their business, especially since their franchise game launches over the last year have been wildly successful. So it still felt safe to hold onto to the stock because the downside seemed limited even if the acquisition fell through. But it no longer seemed like it deserved such an outsized position.
Sold half of my shares, and still holding onto the other half. ATVI is no longer my largest position.
The position didn't end up having the upside that I hoped for, but it worked out reasonably well given that I didn't think the shares were getting much valuation lift from the acquisition until recently. Still have a lot of shares acquired pre-acquisition so those should work out well when I finally sell them or the acquisition goes through.
No. of Recommendations: 3
Im in the same boat. Purchased a couple of lots begining pre acquisition announcement, and adding on dips. Its now a 2.5% position for me. Since there is still a 5.5% gap to close between yesterdays close and the 95 buyout, Im wondering why I wouldnt add here. The IRR would be very high. And the thinking goes that if somehow the deal was postponed, ATVI would rerate higher anyway, and MSFT would have to sweeten the deal. At the very least Im planning to hold until the acquistiion goes through. And then probably sell the MSFT shares, which seem quite pricey at the moment. Maybe add to DG.
No. of Recommendations: 1
Well good luck to both of us then. I hope this closes out soon.
The problem will become where to deploy the cash. I am having a hard time finding things that I want to invest in after the run up this year.
On that point, anyone with good ideas? Do people have thoughts on INTC? Its one of the few tech things that trade at an attractive valuation but INTC has lost so much to competition and poor execution over the last 5 years. Given the capital intensive nature of the industry and the benefits of being further down the experience curve, I used to think it had a huge moat. But that has turned out not to be as strong an advantage as I would have thought. But I can't get myself to sell out of it. Its an oligopolistic industry, with huge returns to scale. INTC strategy of being differentiated through vertical integration in a category where most are using foundries seems to me to be a large source of strategic leverage if they can get the execution right. So its made it difficult to get excited about selling out of the shares even though its been a stinker now for a long time. I am constantly thinking about investing more instead. Is that a sucker's bet?
No. of Recommendations: 1
'Since there is still a 5.5% gap to close between yesterdays close and the 95 buyout, Im wondering why I wouldnt add here. The IRR would be very high. And the thinking goes that if somehow the deal was postponed, ATVI would rerate higher anyway, and MSFT would have to sweeten the deal.'
Agree. I also took a small work out position @89.65. FTC and Khan need to settle down imo as it seems more about ideology than authentic concern and consumer protection.
My recent buys have been DG and added to OXY & CVX last month. NKE is on my radar at this level but patience required. Recent AI hype seems intense- who knows who the real winners will ultimately be so that category is filed in my too hard pile.
