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Wall Street was Betting That Microsoft-Activision Deal Will Fail

Draugoth

Gold Member

Shares of the gaming juggernaut are trading 25% below Microsoft’s $95 offer, indicating investors see risk the buyout won’t close as planned. This risk premium is more than double that of Twitter Inc. following Elon Musk’s offer, and higher than most of the announced -- but still pending -- deals tracked by Bloomberg.

With Activision shares trading 25% below Microsoft's offer, Wall Street certainly believes the deal will fail. Activision shares have been hovering around $76. Anyone who buys now will receive $95/share if the Microsoft deal is approved. That's quite a return, with a discrepancy suggesting that the market believes the deal will fail.


Edit/Update: Activision Blizzard shareholders approve the acquisition lol

 
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mitch1971

Member
 

anthony2690

Member
Is there any reason why shareholders would vote against this going through?

Surely they would prefer a guaranteed payday right?
 
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It's the perfect poison pill for the gaming subscription future, as someone who doesn't like it, I hope it this goes through. As MS becomes bigger it becomes harder for them to put all their chips on Gamepass.

It's also going to be very entertaining to see what happens to Blizzard, it just can't gent any worse with them, they need a massive shake up and this could be it.

Another problem if it doesn't go trough is that MS could try to use that money to get another big publisher.
 
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Seemed kind of odd to suggest that MS is even close to a monopoly in anything gaming related when everyone is pursuing acquisitions and they're probably 4th place behind Tencent, Nintendo and Sony. Oh well. It would certainly be a set back for them if blocked, but personally I don't play much of any Activision / Blizz games.

Was basically just looking forward to THPS and Diablo 4 lol.
 

Draugoth

Gold Member
Seemed kind of odd to suggest that MS is even close to a monopoly in anything gaming related when everyone is pursuing acquisitions and they're probably 4th place behind Tencent, Nintendo and Sony. Oh well. It would certainly be a set back for them if blocked, but personally I don't play much of any Activision / Blizz games.

Was basically just looking forward to THPS and Diablo 4 lol.

They would have monopoly if their studio management wasn't so shitty.
 

elliot5

Member
There is no capital gains tax system in the world that would make a 25% gain in less than a year not worth it.
Even if the deal didn’t go through i feel like with mw2 Warzone Overwatch Diablo and mobile Activision is bound to rebound back to 95 naturally though it may just take a little longer
 

GHG

Member
You think it's a bad idea?

Not touching it. Poor risk/reward at this stage.

The downside if the deal gets blocked is huge, especially when you take their most recent earnings in to account. Without the potential acquisition that earnings report would have tanked their stock by more than 20% in the current market environment.

And you just know that if the deal falls through it would get announced pre or post market.

Even if the deal didn’t go through i feel like with mw2 Warzone Overwatch Diablo and mobile Activision is bound to rebound back to 95 naturally though it may just take a little longer

Have a look at their most recent earnings report, look at the rampant inflation on a global scale, then look at the general environment in the stock market and come back to me. A lot of businesses are never going back to their highs of last year.
 
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ARK1391

Member
Clearly I don't inderstand what this means because to me, the shares being 25% below the proposed deal would be a no brainer for Activision/Blizzard investors to take.

But perhaps this is an issue with the FCC because the share price is so much lower than the buyout proposal? Maybe someone here knows more about the problem?
 

Zeroing

Gold Member
Seemed kind of odd to suggest that MS is even close to a monopoly in anything gaming related when everyone is pursuing acquisitions and they're probably 4th place behind Tencent, Nintendo and Sony. Oh well. It would certainly be a set back for them if blocked, but personally I don't play much of any Activision / Blizz games.

Was basically just looking forward to THPS and Diablo 4 lol.
I've seen people arguing that MS owns too much power/influence outside of gaming and that gaming would be another step were they are in everything. I kinda understand, but I dunno, let them fight, I do not care.
 
I've seen people arguing that MS owns too much power/influence outside of gaming and that gaming would be another step were they are in everything. I kinda understand, but I dunno, let them fight, I do not care.
The honest argument to be made is that maybe it's a really bad idea to allow a company to get this big. We all know what the end result is and we have already seen it, these big companies are just going to bully everyone else with their size and tentacles in everything.

The defense of free market etc doesn't work because these companies already grew up on a corrupt system and have a history of abusing the system. We are already way past the time to break them down.

I'm no commie but I'm also no fool.
 
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Clear

Gold Member
Seemed kind of odd to suggest that MS is even close to a monopoly in anything gaming related when everyone is pursuing acquisitions and they're probably 4th place behind Tencent, Nintendo and Sony. Oh well. It would certainly be a set back for them if blocked, but personally I don't play much of any Activision / Blizz games.

Was basically just looking forward to THPS and Diablo 4 lol.

Its not to do with monopolism, what I understand the concern is about are so called "network effects" where tech-giants buy businesses in order to funnel revenue into their overall ecosystems to the detriment of competitors outside of those ecosystems. Essentially its about them being able to outcompete indirectly through the power of association, so for instance say Amazon bought a market leading product in whatever. They could then not only benefit from the purchase by selling it on their storefront, but they could kill all external competition to that certain product by featuring it prominently and advantageously on their storefront.

Its a pretty subtle difference and one that's only really caught political and regulatory attention since so much of the economy has become digital. With the pandemic really accelerating the process and spurring a bi-partisan interest in curtailing the powers of the tech-giants.
 
Two trillion dollar mega corp wants to invest 80 billion+ dollars into another industry in the span of a year.

I honestly don’t see what the big deal is. Fools in Washington be trippin
 

ManaByte

Gold Member
Clearly I don't inderstand what this means because to me, the shares being 25% below the proposed deal would be a no brainer for Activision/Blizzard investors to take.

But perhaps this is an issue with the FCC because the share price is so much lower than the buyout proposal? Maybe someone here knows more about the problem?
The problem is that MS will put COD on GamePass and that’s just not fair. So if you throw a big enough fit on Twitter and call them enough names with the right hashtags, you can get your way.
 
I think it's safe to say that this deal is still going to be a lot to talk about.

What a nightmare Microsoft has gotten themselves into. If this deal doesn't go through they're going to lose billions of dollars for sure.
 
Its not to do with monopolism, what I understand the concern is about are so called "network effects" where tech-giants buy businesses in order to funnel revenue into their overall ecosystems to the detriment of competitors outside of those ecosystems. Essentially its about them being able to outcompete indirectly through the power of association, so for instance say Amazon bought a market leading product in whatever. They could then not only benefit from the purchase by selling it on their storefront, but they could kill all external competition to that certain product by featuring it prominently and advantageously on their storefront.

Its a pretty subtle difference and one that's only really caught political and regulatory attention since so much of the economy has become digital. With the pandemic really accelerating the process and spurring a bi-partisan interest in curtailing the powers of the tech-giants.
So if the Activision deal
Doesn’t go through they buy Ubisoft then?
 
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