@diggydog：Buy $Activision Blizzard(ATVI)$ , now trades at a 22% discount to $Microsoft(MSFT)$ offer price. As we know, MSFT plans to acquire ATVI for USD 69B or $95/share. But the deal could eventually falling apart over antitrust concerns. The main worry centers around Call of Duty, which is among the most popular console games on the market. Sony has expressed concerns that if Microsoft pulled the title, it could sway potential customers away from its PlayStation console and toward Microsoft's Xbox ecosystem. Microsoft Gaming CEO Phil Spencer has said in interviews that the company plans to keep the franchise on PlayStation consoles as long as there is a PlayStation. Microsoft is on record repeatedly saying it will support PlayStation. Activision Blizzard CEO Bobby Kotick wrote in a letter to staff earlier this month that he still expects the deal to close by June 2023. But even if the deal fails, ATVI - The firm behind Call of Duty and Candy Crush - recently is doing very well on its own. Activision Blizzard recently beat expectations for the third quarter and said that Call of Duty: Modern Warfare II was the fastest-selling title in the franchise's history. Shares had suffered over the past year amid concerns about the future of the game and the company’s development pipeline. "Activision's shares are severely discounting the fundamental improvements being seen with its business and the strong growth potential in 2023," MKM Partners analyst Eric Handler wrote in upgrading the stock to Buy this past week. "We continue to believe the deal will be approved....However, if the transaction was denied, in our view, the shares should merit an $85 fundamental value." Handler expects 2023 to mark a return to full-year growth, thanks to carry-over from this year's game releases and new title launches next year. If the deal is stopped by regulators, Activision could receive a reverse termination fee of between $2 billion and $3 billion, depending on when notice is provided. Regulators in the U.K. and the European Union have opened in-depth investigations after raising concerns about how the deal would affect competitors like Sony's (SONY) PlayStation. The U.S. Federal Trade Commission is expected to weigh in soon. Regulators in Brazil and Saudi Arabia have already approved the deal. Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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