The Times - UK (2022-02-16)

the times | Wednesday February 16 2022 2GM 39

Business

Warren Buffett revealed this week that
he had put aside his renowned aversion
to technology stocks — at least
temporarily — and it has paid off.
Berkshire Hathaway, the Sage of
Omaha’s main investment vehicle,
lodged a filing with regulators showing
that it had bought almost 15 million
shares in Activision Blizzard, the
computer games publisher, in the final
quarter of last year.
In mid-January, Microsoft announ-
ced a $68.7 billion takeover of Activi-
sion, sending the shares sky-rocketing,
significantly boosting the value of
Berkshire Hathaway’s stake. The
investment firm estimated that its
14.7 million shares in the maker of Call
of Duty and Candy Crush were worth
about $975 million at the end of last
year. At Monday’s close, they were
worth $1.2 billion, although at the
$95-a-share bid price they would be
worth almost $1.4 billion.
Another leading American investor,

Daniel Loeb at Third Point, the hedge

fund, bought two million shares in

Activision in the final quarter.

The stock filing did not reveal the

details of whether the Berkshire Hatha-

way investment had been made by

JAVIER BARBANCHO/REUTERS

A

slide in annual
profits and a fall
in new customer
numbers at
Plus500 have
provided the latest signs
that the pandemic-fuelled
boom in financial markets
trading has receded (Ben
Martin writes).
Pre-tax profits at the
London-listed trading group
dropped to $386.4 million in

2021 from $523.3 million a

year earlier, when the

company received a boost

from amateur punters piling

into the markets at the

onset of Covid-19. The

number of new customers

fell by a third to 196,336

compared with 2020, while

its base of active traders

slipped by 6 per cent to

407,374.

The news prompted a

4.1 per cent slide in

Plus500’s share price, which

fell 62p to £14.60½ despite

the group unveiling a

$115 million capital return to

investors through a

combination of dividends

and share buybacks. This

was more than some in the

City had been forecasting,

with analysts at Jefferies

expecting $95 million.

Plus500, which is based in

Israel, is a seller of complex

derivatives called contracts-

for-difference that enable

punters to speculate on the

direction of prices in

financial markets. They are

particularly popular during

times of heightened stock

market volatility, when

traders hope to capitalise on

sudden price movements to

generate quick profits. They

are risky, however, because

they allow punters to ramp

up the size of their wagers

using leverage, which can

exacerbate losses should

bets go awry. Seventy-three

per cent of Plus500’s retail

customers lose money

trading the derivatives.

The coronavirus outbreak

in early 2020 created the

ideal conditions for

companies such as Plus500

to thrive. Have-a-go traders

who were bored during

lockdowns flocked to

derivatives to try to make

money from whipsawing

markets. The trading boom

faded last year, however,

after lockdown restrictions

were eased and as volatility

abated.

Nevertheless, Plus500’s

business remains

significantly bigger than it

was before the pandemic.

It has more than double the

199,720 active customers it

counted in 2019. Revenues

last year of $718.7 million

were 103 per cent higher

than the year before the

Covid pandemic started.

Worries about the threat

of a Russian invasion of

Ukraine, which have roiled

markets in recent weeks,

will have benefited the

group. David Zruia,

Plus500’s chief executive,

said yesterday that it had

been “very volatile” start to

2022.

He oversaw the company’s

first ever acquisition last

April when it struck a

$30 million deal to buy

Cunningham, an American

futures and options broking

business. Zruia, 38, said that

the group was eyeing

further deals and other

markets, including Japan

and the United Arab

Emirates. The company also

recently started a

conventional share-dealing

service in Europe and plans

to launch it in Britain later

in the year.

Tempus, page 42

Plus500, which sponsors

Atlético Madrid, the Spanish

football club, has started a

conventional share-dealing

service in Europe, which it

plans to bring to Britain

Atom Bank has been valued at

£435 million in what is likely to be the

digital lender’s last fundraising round

before it attempts a listing on the stock

exchange.

The Durham-based company has

raised £75 million from its two biggest

shareholders — BBVA, the Spanish

banking group, and Toscafund, the

British investment manager — and has

opened the round to its other existing

investors. The bank is moving into

profitability and is looking at an initial

public offering, which Mark Mullen, its

chief executive, said was likely next

year. “The next time we do anything in

terms of raising money, it’ll likely be

through an IPO process,” he said. “You

can never absolutely guarantee it, but

that’s the plan.”

The latest financing brings the

amount raised by Atom since it was set

up in 2013 to about £500 million. It also

represents a partial recovery in its valu-

ation, which reached £555 million in

2019 before falling to £300 million at a

fundraising last year.

The branchless bank focuses on

savings accounts, mortgages and busi-

ness loans. It is one of a new breed of

banks, including Monzo and Starling,

that are shaking up the finance industry

by offering a digital-only service

through smartphones and tablets.

Atom had been loss-making since

launching to the public in 2016, but is

moving into the black. Mullen, 54, said

that the three months to the end of

December had marked the group’s first

full quarter of operating profits.

Atom’s value

rises before

listing plan

Ben Martin

Buffett tries his hand at technology play

Dominic Walsh Buffett, 91. himself or by his investment
managers Todd Combs and Ted
Weschler.
The lollypop-sucking billionaire is a
friend of Bill Gates, the Microsoft co-
founder, and has often said that he
would not buy shares in Microsoft to
avoid a conflict of interest. Gates, 66,
was on the board of Berkshire Hatha-
way for 16 years until 2020, while Buf-
fett was a trustee of the Bill and Melinda
Gates Foundation until last year, when
the couple announced that they were
separating.
In the fourth quarter, Berkshire also
added to its stake in Chevron, the oil
company, while reducing its holdings in
healthcare businesses including
Bristol-Myers Squibb and Abbvie.
Apple remains its largest common
stock holding.
Berkshire is expected to disclose
more about its stock purchases, buy-
backs and cash resources next week
when it releases end-of-year results
and Buffett’s widely read annual share-
holder letter.

Overwatch is one of the computer

games in Activision Blizzard’s stable

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Business Editor, Richard Fletcher

Airbnb hailed a change in travel habits

last night as it reported strong fourth-

quarter results, with predictions for

first-quarter revenue that beat expecta-

tions on Wall Street.

Shares in the home rental agency

rose sharply in after-hours trading as

the market reacted to an recovery

driven by guests opting for domestic

travel and staying for longer in proper-

ties at higher prices. People were stay-

ing for weeks, months or even entire

seasons at a time outside cities, where

they could work remotely, it said.

“Nearly half of our nights booked in Q4

were for stays of a week or longer. One

in five nights booked were for stays of a

month or longer.”

The San Francisco-based Airbnb,

which was hit initially by the pandemic,

reported “non-urban gross nights”

booked up about 45 per cent in the final

three months of 2021 against the same

period in 2019. It expects current-quar-

ter revenue of $1.4 billion to $1.5 billion,

higher than analysts’ estimates of

$1.2 billion. Strong demand pushed up

prices charged by hosts, with average

daily rates in the fourth quarter up

20 per cent at $154.

Airbnb, founded in 2008, helped to

transform the international travel

market by enabling users to rent out

rooms and homes. Today its platform

has 5.6 million active listings in 100,000

cities in more than 220 markets. The

company, which has a market value of

$114.4 billion, went public via an initial

public offering in December. Its shares

were up 4 per cent at $187.30 last night.

Airbnb cashes

in on trend for

longer breaks