Letter Excerpt: (ATVI)

In the past quarter, the fund added one additional holding. We had been peering into the finances of the beaten-down video game publishing company Activision Blizzard.  This company is well known for its production of games such as the Call of Duty franchise, World of Warcraft, and Candy Crush. Previous management had neglected complaints of workplace misconduct within their company, and the media grasped this story in an instant. Consequently, the share price began to fall in response.  We had been watching management closely in anticipation of the share price continuing to tumble, despite proclamations of changing workplace culture and rumblings of new management which would soon take the helm.   Economically, nothing about the business had changed, the issue was a social stumbling block with the company already on the path to redemption.  The price per share inched ever so closer to our upper target with hopes of taking a stake.  However, once Microsoft had set its eyes on the same company and announced a possible buyout at $95 a share, the terms changed.  Once the initial volatility dust had settled, we entered into a calculated investment strategy with a small positioning to become profitable regardless of whether or not the potential merger came to fruition.