Well, I didn't see this one coming.
The UK regulator has blocked the takeover for the UK at least. https://www.theguardian.com/technology/2023/apr/26/microsoft-bid-for-activision-blizzard-blocked-by-uk-competition-regulator
Seems there's a fair bit of risk on this one.
The Federal Trade Commission is apparently looking to send the merger before a judge 3-1.
https://au.investing.com/news/stock-market-news/the-ftc-moves-to-block-microsofts-activision-blizzard-deal-432SI-2739883
There's a blog with some analysis here. Not sure whether I agree, but the blog is suggesting this decision may be partially political. http://www.fosspatents.com/2022/12/us-federal-trade-commission-reportedly.html
Either way I think this increases the risk of the deal falling through.
Strangely, Activision is now trading at $73.2, when the takeover is set for ~July next year.
I think part of this reflects increased inflation and interest rates, thus decreasing the real return and making alternates more attractive.
It also seems like there seems to be some worry the deal might not go through, but I'm not exactly sure why.
https://www.cnbc.com/2022/04/27/activision-blizzard-sinks-to-lowest-point-since-microsoft-deal-news.html
Decent arbitrage opportunity if the deal goes through. Potential to get burned if not. I own some shares.
My thoughts are this shows the potential in the gaming sector. With the ongoing trek to the metaverse, AR & VR this might bode well for our Aussie Playside Studios. PLY.
One of the big issues with AI taking over many jobs done by humans, what is going to keep all of these people occupied.? Maybe artificial reality, virtual reality, might be their reality.
PLY. Held IRL
@Learner, my thoughts too - I am very bullish on the gaming sector in general. While I think the 'metaverse' is overhyped, I don't blame companies for dipping their toe in the water and seeing where that takes them. If anyone doubts the gaming sector and its importance, have a look at the below graph. I would suspect most people will fall off their chair when they realise that mobile gaming (on its own) is bigger than both box office entertainment and music combined. That is crazy.
I think conventional gaming - console, PC and mobile - will remain 'king' for the next few years without question.
My exposure to the sector is also PLY, which is a top five holding in my satellite portfolio. Yes, its run hard in the last few months, but I have no intention of selling - unless prices get silly. I think PLY is fair value at around 90c - $1. The company is innovative, have invested well in staff, appear to genuinely care about their culture and have an excellent management team - who own a large chunk of the company themselves. I am confident that in 3-4 years time, they will be a much bigger company than they are now and the share price will reflect this.
While Microsoft - and other companies of that size - aren't really where I like to fish, that would be my pick out of the 'mammoth' companies based in the US. My exposure to the US is the NASDAQ 100 ETF, in which Microsoft is a top 10 holding (with 10% of the weighting). I think the Activision deal is an excellent acquisition for Microsoft - thus my conviction only grows. Essentially the primary reason for me holding the NASDAQ ETF is to gain exposure to Microsoft, in addition to a few other companies I remain bullish on (Amazon, NVIDIA and Alphabet). NVIDIA is another one that has the sector by the scruff of the neck - and for good reason - they innovate better than their peers and their products are world leading.