Here’s Why Baron Funds Sold its Activision Blizzard (ATVI) Position

Baron Funds, an asset management firm, published its “Baron Partners Fund” fourth quarter 2021 investor letter – a copy of which can be downloaded here. An increase of 19.54% was delivered by the fund’s institutional shares for the fourth quarter of 2021, outperforming the Russell Midcap Growth Index which gained 2.85%  for the same period. The S&P 500 Index rose 11.03% while the Morningstar Large Growth Category (the “Peer Group”) Average increased 6.91%. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Baron Partners Fund, in its Q4 2021 investor letter, mentioned Activision Blizzard, Inc. (NASDAQ:ATVI) and discussed its stance on the firm. Founded in 1970, Activision Blizzard, Inc. (NASDAQ:ATVI) is a Santa Monica, California-based video game company with a $62.5 billion market capitalization, and is currently spearheaded by its CEO, Bobby Kotick. Activision Blizzard, Inc. (NASDAQ:ATVI) delivered a 19.51% return since the beginning of the year, while its 12-month returns are down by -14.76%. The stock closed at $79.51 per share on March 15, 2022.

Here is what Baron Partners Fund has to say about Activision Blizzard, Inc. (NASDAQ:ATVI) in its Q4 2021 investor letter:

“The Fund’s Core Growth investments were negatively impacted by the market rotation to value-oriented businesses. Fundamentals for most of our Core Growth holdings remain strong. We exited two positions in this space, which included Activision Blizzard, Inc.  We believe ESG concerns at Activision could be a negative for the company in the coming years.

Shares of Activision Blizzard, Inc., a leading video game publisher, detracted from performance. The company reported solid earnings results and maintained guidance for fiscal year 2021. However, the stock fell primarily due to a combination of increased concern around an employee lawsuit alleging sexual harassment and timing delays for two key Blizzard games (Diablo IV and Overwatch 2). We sold our position.”

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Our calculations show that Activision Blizzard, Inc. (NASDAQ:ATVI) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. Activision Blizzard, Inc. (NASDAQ:ATVI) was in 70 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 80 funds in the previous quarter. Activision Blizzard, Inc. (NASDAQ:ATVI) delivered a 33.59% return in the past 3 months.

In February 2022, we also shared another hedge fund’s views on Activision Blizzard, Inc. (NASDAQ:ATVI) in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

Disclosure: None. This article is originally published at Insider Monkey.