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Saudi Arabian Public Investment Fund Purchases $1.4 billion in Activision Blizzard Stock
18/02/2021 à 18:24
The Saudi Arabian Public Investment Fund has
purchased $1.4 billion in shares of Activision Blizzard
, $1.07 billion in Electronic Arts, and $825 million in Take-Two Interactive, boosting the investment fund's U.S. equity exposure to nearly $12.8 billion. This purchase represents a significant interest in western video game developers by Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud, chairman of the Public Investment Fund, who previous cited
Call of Duty as his favorite diversion
: This really isn't a particularly good or bad thing. Activision Blizzard, Electronic Arts, and Take-Two are all publicly traded companies with no say in who purchases shares, and the valuations total around 2% of the company - nowhere near enough to exert any amount of control. It's merely interesting that a prominent international fund has invested so much into the these game companies, which is more a sign of how well they're doing than anything else.
Managing roughly $450 billion in assets, the
Public Investment Fund
is one of the
largest sovereign wealth funds
in the world, operating a portfolio of over 200 investments on behalf of the government of Saudi Arabia. In short, they invest the wealth of Saudi Arabia within the global market. Those in the United States may be unfamiliar with this concept as the U.S. does not have a sovereign wealth fund on the federal level, although several states have individual ones, such as the Texas Permanent School Fund and University of Texas Investment Management Company, which provide revenue for funding education in the state of Texas.
Largest sovereign wealth funds as of February 2021, from
While this acquisition seems like big news, it's important to remember that this is one of a great number of investments in American companies by an extremely diversified investment fund; the PIF also has interests in Disney, Facebook, Magic Leap, Uber, Lucid Motors, Virgin Galactic, Cisco, and Boeing, among many others. Private equity research firm Quid has estimated over $6 billion in Saudi investment money funneling into Silicon Valley in the last 5 years, much of it from the Public Investment Fund. In that light,
this really shouldn't be seen as Saudi Arabi having any particular interest in games so much as simply increasing its US stock holdings
- albeit a significant investment, from
$7 billion to approx $12.8
. This too may seem like a significant increase, but consider that it follows a
$3 billion cut
between the second and third quarters, as the fund has effectively traded its stakes in real estate for video games.
Keep in mind too that although these are quite large purchases, their 15 million shares only represent a 2% stake in Activision Blizzard. Though that makes them the 6th largest individual shareholder, they're quite a long way from anything close to a majority, and the PIF seems more interested in investing money into strong buys rather than pursuing any particular agenda. With Activision Blizzard and Electronic Arts both having
, including ATVI going through several
all time closing highs
, it really shouldn't be surprising that the Public Investment Fund is diversifying their holdings or that Activision Blizzard is
drawing significant investments
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