Tech giant Microsoft (NASDAQ: MSFT) has announced plans to acquire Activision Blizzard (NASDAQ: ATVI), a company that has dominated the video game space for years. The Wall Street Journal reports that the companies have agreed to an all-cash deal worth $68.7 billion, sending Activision Blizzard stock shooting up.
Full Answer
Will Blizzard’s stock ever recover?
The stock is unlikely to recover until the company proves it can still grow without new releases, or it announces official release dates for Diablo IV and Overwatch 2, providing more near-term visibility to earnings.
What to expect from Activision Blizzard stock after it reports Q2?
Activision Blizzard (NASDAQ: ATVI) is scheduled to report its Q2 2021 results on Tuesday, August 3. We expect the company to likely post revenue and earnings above the consensus estimates, primarily led by continued growth in the Call of Duty franchise as well as World of Warcraft.
What's happening with Blizzard's games?
Turnover within the executive ranks at the Blizzard studio has resulted in the company pushing back the highly anticipated releases of Diablo IV and Overwatch 2, two games investors were counting on to drive growth in 2022.
Does Blizzard need a new game to boost growth?
However, the Blizzard segment has been steadily losing players for several years and is in desperate need of a new release to stimulate growth. Monthly active users (MAUs) at Blizzard have slid from 42 million following the release of Overwatch in 2016 to 26 million in the most recent quarter.
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What will happen to Activision Blizzard stock after merger?
If the merger is approved and completed -- which is still expected to occur by June 30, 2023 -- Activision Blizzard will delist from Nasdaq and no longer be a publicly traded company. This means shareholders will no longer own stock in the surviving business, which would be a wholly-owned subsidiary of Microsoft.
What will happen to Activision Blizzard shareholders?
At a special meeting today, Activision Blizzard stockholders approved Microsoft's proposal to acquire the gaming company for $68.7 billion. This all-cash transaction values the creator of games like Call of Duty, World of Warcraft and Candy Crush at $95 per share.
Is Blizzard stock a buy?
Activision-Blizzard Stock Is a Buy Despite Negative Media Attention.
What will Activision shareholders get?
On January 18, 2022 , Microsoft announced plans to acquire Activision Blizzard for $95.00 per share in an all-cash transaction. Subject to customary closing conditions and the completion of regulatory review, the proposed transaction is expected to close in Microsoft's fiscal year ending June 30, 2023 .
What happens to the stock when a company is acquired?
If the buyout is an all-cash deal, shares of your stock will disappear from your portfolio at some point following the deal's official closing date and be replaced by the cash value of the shares specified in the buyout. If it is an all-stock deal, the shares will be replaced by shares of the company doing the buying.
Will Activision acquisition go through?
Investors approved the acquisition like expected, but tougher scrutiny from Biden's FTC is the real hurdle. Shareholders overwhelmingly approve of the sale. Activision Blizzard shareholders overwhelmingly approved a planned sale to Microsoft on Thursday, with 98% voting in favor of the proposed deal.
Should I sell my blizzard stock?
Activision Blizzard(ATVI-Q) Rating Stockchase rating for Activision Blizzard is calculated according to the stock experts' signals. A high score means experts mostly recommend to buy the stock while a low score means experts mostly recommend to sell the stock.
Is Activision Blizzard a good stock to buy now?
With shares currently trading more than 18% below its acquisition price, Activision Blizzard might not only be worth holding, but also buying.
Does Microsoft buy Blizzard?
Microsoft president Brad Smith has claimed the company's proposed acquisition of Activision Blizzard is proceeding relatively quickly. It was announced in January that the Xbox owner intends to purchase Activision Blizzard in a $68.7 billion deal – the game industry's biggest ever by some distance.
Is MSFT buying Activision?
There was some head-scratching across the big tech and gaming worlds in January when Microsoft announced an agreement to buy Activision Blizzard, a leading videogame publisher, for $68.7 billion.
How much is Microsoft buying Activision for?
a $68.7 billionMicrosoft shocked the tech and gaming world on January 18th when it announced it would acquire Activision Blizzard in a $68.7 billion deal, by far the biggest ever in gaming.
How much did Bethesda sell for?
$7.5 billionMicrosoft closes $7.5 billion Bethesda acquisition, aiming to take on Sony with exclusive games. Microsoft has closed its $7.5 billion acquisition of ZeniMax, the parent company of Bethesda. Microsoft confirmed that some new Bethesda games would be exclusive to Xbox consoles and PCs.
Why Is Activision Blizzard Stock Down?
Sexual harassment is a serious allegation. When the CEO of a Fortune 500 company is involved, it’s all over the headlines. As a result, shareholders may look for an exit to avoid losses.
Stock Analysis
A lot is weighing on ATVI stock right now, erasing all Activision’s returns since the pandemic. Since the pandemic forced people to shelter inside, video games were a big business.
Can Activision Blizzard Stock Bounce Back?
It’s hard to predict exactly what will happen in the next few months. Thus several scenarios can happen with Activision blizzard stock, such as:
Is It Time to Buy Activision Blizzard Stock?
All in all, ATVI still has an incredible library of hit games. The company’s legacy is comparable to Disney’s but for gaming. If the company can overcome these new issues, it can play a lead role with the market set to reach nearly $400 billion by 2026.
About Pete Johnson
Pete Johnson is an experienced financial writer and content creator who specializes in equity research and derivatives. He has over ten years of personal investing experience. Digging through 10-K forms and finding hidden gems is his favorite pastime.
Near-term challenges
Activision Blizzard is not a highly diversified game producer, but its concentrated portfolio of popular titles makes it one of the top gaming companies in the world, in addition to one of the most profitable.
Uncertainty is a friend to value investors
The stock is unlikely to recover until the company proves it can still grow without new releases, or it announces official release dates for Diablo IV and Overwatch 2, providing more near-term visibility to earnings.
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Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community.
The gap between shares' current price and what Microsoft's offering looks too good to pass up
Collin Brantmeyer began writing for Fool.com in 2022. He is the author of DEATH OF A CAR SALESMAN, a novel that Indie Reader describes as "a page-turner that takes murder mystery lovers on a wild ride of descriptive scenes, clever dialog, and classic 'whodunit' moments."
The details
Microsoft has agreed to acquire Activision Blizzard for $95 per share in an all-cash deal. As of Tuesday, Jan. 25, Activision Blizzard shares were trading for $80, 18.75% below its acquisition price.
What could go wrong
In any acquisition, there is a possibility that the deal will not be approved by federal regulators, especially as big tech continues to draw ire from Congress. If the deal does fall through, few other suitors can afford Activision's $68.7 billion price tag, and you'll be left owning shares of a company plagued with scandal over the past year.
The bottom line
This isn't Microsoft's first go-around with big acquisitions and federal regulators. In 2016, Microsoft acquired LinkedIn for $26.2 billion. Interestingly, that deal was approved in six short months.
MSFT will buyout Activision in an all-cash deal
Microsoft is buying Call of Duty, Tony Hawk Pro Skater, and World of Warcraft maker Activision Blizzard for $68.7 billion in an all-cash deal.
Microsoft roots its decision in community, but Activision employees are still struggling
In December, reports about a major Activision resignation swirled. This followed the walkout and petition employees produced to attempt to get Kotick out of his chief executive post. Unionization is still on employees' minds, and it isn't clear whether the internal community will be able to do so under Microsoft’s watch.
NASDAQ: MSFT
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Locking in a quick gain is tempting, but there are good reasons to hold your Activision Blizzard shares until the deal is finalized
Microsoft 's ( MSFT 5.11% ) proposal to buy top game publisher Activision Blizzard ( ATVI 0.37% ) is far from a done deal. On Tuesday, the software giant agreed to pay $68.7 billion, or $95 per share, in an all-cash deal to buy Activision .
NASDAQ: MSFT
I bought shares of Activision Blizzard when the stock was trading in the $60s, but deal or no deal, there are two reasons I'm not planning to cash out anytime soon.
Reason 1: It's easy money
Microsoft's buyout offer was 15% above Tuesday's closing price. Investors can earn another 15% gain by simply holding their Activision shares until the deal is finalized, which will look like a smart move if the market declines in 2022. But first, the deal has to be approved. Here's why that should happen.
Reason 2: The deal might not happen
One reason the deal won't receive approval is that it would fuel more industry consolidation and, in turn, give big tech the green light to make more deals and dominate a large and growing entertainment market.
It's a win-win
If Microsoft's acquisition attempt fails, Activision shareholders would still own a highly profitable game company that is well-positioned to ride the future growth of the industry, with top franchises under its belt, and interests in esports and consumer products to boot.
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