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Wall Street Showing Signs Of Skepticism In Microsoft's Activision Blizzard Deal, Report Claims
Wall Street Showing Signs Of Skepticism In Microsoft's Activision Blizzard Deal, Report Claims-November 2024
Nov 8, 2024 8:52 PM

  There may be some newfound skepticism that Microsoft's acquisition of Activision Blizzard will go through, based on signs from Wall Street. This comes amidst a prediction that US President Joe Biden's antitrust enforcers could possibly derail the pending deal. Shareholders will vote today about whether or not the company should sell, which, if successful, will see Microsoft pay $95 per share or $75 billion in total for the sale. [Update: That shareholder vote was indeed successful, though that still doesn't mean the deal will go through.]

  Activision Blizzard has faced a challenging period, with lower revenue and Call of Duty sales, and the loss of 60 million players in a year potentially dragging down investor confidence in the company. There's also the matter of the Federal Trade Commission serving as a hurdle for the Microsoft acquisition. Additionally, some activist investor groups are asking shareholders to vote against the deal due in part to a potential golden parachute for Activision Chief Executive Officer Bobby Kotick, who is expected to leave the company after Microsoft takes over.

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  Now Playing: The Hidden Gems Of The Xbox Activision Acquisition

  That Activision Blizzard's stock price is so much lower than Microsoft's offer could be viewed as unusual, as acquiring at under 25% of Microsoft's offer could in theory earn investors some free cash once the deal is completed. Even if the sale is approved by shareholders, Microsoft still has to deal with an FTC review. Led by Lina Khan, the FTC has taken a more active approach in reviewing deals, which has seen Nvidia's proposed acquisition of ARM Ltd. and Lockheed Martin Corp.'s bid to acquire Aerojet Rocketdyne Holdings Inc. called off.

  If Microsoft clears FTC scrutiny, it'll also need to have its acquisition approved by the European Union and China.

  Wedbush Securities analyst Michael Pachter is more positive about the outcome of the Microsoft purchase of Activision Blizzard, and explained that even if the FTC launches a lawsuit, it will have difficulty in defining the concentrated market issue that the merger could cause. Lawyer Richard Hoeg is skeptical that Wall Street believes the deal will fail, calling the report "complete, unmitigated, bullshit."

  For more on the deal, check out GameSpot's opinion piece "Bobby Kotick's Payout Is A Small Price For The Good That Could Come From Microsoft's Acquisition" and what's at stake in the shareholder vote.

  Most Anticipated Xbox Games For 2022 And Beyond

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