Activision Blizzard (NASDAQ:ATVI) stock is slightly in the red today, but it’s not because of earnings or macroeconomic news. Rather, it’s due to potential pushback from regulators in the U.K. Reportedly, the regulators are concerned about a proposed deal between Activision Blizzard and Microsoft (NASDAQ:MSFT).
Microsoft has proposed to buy out Activision Blizzard for $75 billion. Clearly, this would create a vastly influential and powerful combined business. After all, Activision Blizzard is a giant in the gaming industry, while Microsoft is an all-around tech behemoth.
Per the Wall Street Journal, regulators in the U.K., collectively known as the Competition and Markets Authority (CMA), expressed concerns Microsoft’s proposed acquisition of Activision Blizzard would “further consolidate what it called Microsoft’s strong position in cloud gaming.” Furthermore, the regulators claimed a combining of the two companies “would hurt U.K. gamers.”
In other words, the CMA are worried the combined business would create an anti-competitive gaming market environment. The CMA commenced this particular probe back in July, but is just now publishing its provisional findings.
What’s Happening With ATVI Stock?
This certainly isn’t positive news for Activision Blizzard. However, the market’s response was fairly mild. As of 10:30 a.m. Eastern, ATVI stock was down between 1% and 2%.
Perhaps the market’s negative response was moderate because this isn’t necessarily the end of the story. The CMA, per WSJ, “said it would ask both companies to propose ways to ease its concerns.”
Additionally, the regulators reportedly “set a final decision about whether to let the deal proceed for late April.” Thus, there may still be a positive, mutually acceptable outcome for the CMA and for Activision Blizzard and Microsoft. Today, however, ATVI stock investors are feeling somewhat wary and there are more sellers than buyers, as the outcome of this regulatory roadblock is still unknown.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
