FTC Seeks to Block Activision Blizzard Microsoft Takeover. Will the Deal Go Through?
The Federal Trade Commission is seeking to block technology giant Microsoft Corp. from acquiring leading video game developer Activision Blizzard, Inc, claiming that the $69 billion deal, Microsoft's largest ever and the largest ever in the video gaming industry, would enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business.
However, Activision Blizzard CEO Bobby Kotick said on Friday that Microsoft's deal to buy the game developer will go forward despite the FTC's plans to block the deal. Kotick believes the FTC's allegations are factually incorrect and believes Microsoft will win the challenge.
In addition to the above two "parties", there is another famous "potential victim" in this case - Warren Buffett.
According to FactSet, as of Dec. 7, Berkshire held 7.69 percent of Activision Blizzard, totaling 60,142,000 shares worth about $4.6 billion; Berkshire's cost per share is $75.70, and it currently has a book loss of about 94 cents per share, for a total loss of just over $56.5 million.
Berkshire already held 14.658 million shares of Blizzard when the acquisition deal was announced in January this year. By the end of March this year, Berkshire had increased its holdings by 49.657 million shares, and by the end of June it had increased its holdings by another 4.1 million shares. As a result of buying Blizzard "just in time" before Microsoft, many media have questioned whether Warren Buffett had access to insider information in advance. In this regard, Warren Buffett came out to clarify that he did not know about the Microsoft acquisition in advance.
At the annual shareholder meeting in April, Buffett again revealed that Berkshire had increased its stake in Activision Blizzard to 9.5% and would profit from a bet on the merger arbitrage if Microsoft's offer went through. He has been buying Activision stock since the Microsoft acquisition deal was announced, as the company's shares were priced well below Microsoft's offer.
The situation now is that the deal does have greater variability; Warren Buffett's investment, which is based on speculative arbitrage purposes, is not without the possibility of losing money. Berkshire turned to reduce its holdings in Blizzard in the third quarter, perhaps also a side note that its confidence in this bet is beginning to waver.
Mooers, what do you think? Do you think Microsoft will succeed in acquisition of Blizzard? Will Warren Buffett, who entered for the purpose of arbitrage, end up with a loss? Leave your comments in the comment sections!
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72859136 : Microsoft can make the deal before the deadline.
dynamic Mole_9542 : I believe the deal will go thru
sschevyrob00 : I believe it will
Giovanni Ayala : There's always some Daum Conspiracy
Sherman Li : Money talk
Surely can go through
102133981 : Probably
Giovanni Ayala : @Alvin Chow 邹咏翰@bullrider_21@Ripper1986@SpyderCallWhat do you guys think of this ?
J Tan88 : ….Buffett did noT know about the Microsoft acquisition in advance…….
Gates and Buffett are bridge game mate
JoshGoesGhost : I don't think it's going through. Microsoft has been a favorite for anti trust some 1995, this deal almost seems obscene....giving Nintendo call of duty for.10 years as a bartering tool also seems, idk,..farting in the court room after the prosecutor has laid out his evidence.
patient Loris_9135 : I believe the deal will go through
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