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ATVI Stock Pops as U.K. Eases Up on Microsoft-Activision Deal


  • Activision Blizzard (ATVI) is trending today on news that U.K. regulators are dropping concerns over console competition.
  • This represents a step forward in Activision’s potential deal with Microsoft (MSFT).
  • ATVI stock surged 6% in early trading.
ATVI stock - ATVI Stock Pops as U.K. Eases Up on Microsoft-Activision Deal

Source: Sergei Elagin / Shutterstock.com

There’s positive news for both Activision Blizzard (NASDAQ:ATVI) and Microsoft (NASDAQ:MSFT) today. Regulators in Britain determined that Microsoft’s potential $69 billion buyout of Activision wouldn’t cause harm to competition in the gaming console market. Consequently, financial traders bought ATVI stock on heavy volume this morning.

Without a double, Microsoft seeks to generate revenue from Activision Blizzard’s popular video game, Call of Duty. It’s positive news for the two companies, then, that the U.K.’s Competition and Markets Authority (CMA) decided it wouldn’t make sense (financially speaking) for Microsoft to make Call of Duty exclusive to the company’s Xbox console.

In other words, the regulators determined that Microsoft could still have a financial interest in keeping Call of Duty available on Sony’s (NYSE:SONY) PlayStation console.

Call of Duty fans worldwide should be glad to hear this, but what about Activision’s investors? Let’s see how they’re reacting to this development in the U.K.

What’s Happening With ATVI Stock?

As of 10:30 a.m. Eastern, ATVI stock was up 6% and heading toward the $85 level. So, it’s evident that the trading community is bullish on today’s news.

Perhaps investors shouldn’t get too excited, however. Reportedly, Microsoft’s proposed takeover of Activision Blizzard “remains subject to the scrutiny of regulators” in the U.S. and Europe. Furthermore, the CMA “said it was still looking at the impact of the deal on the cloud gaming market.”

In other words, it’s not a done deal yet, and there could still be regulatory resistance to the deal. On the other hand, it sounds like Microsoft is willing to negotiate with regulators. A spokesperson with Microsoft reportedly stated, “We look forward to working with the CMA to resolve any outstanding concerns.”

Going forward, investors should continue to look for new developments as a deal between Activision Blizzard and Microsoft would literally be a game-changer. In the meantime, it’s fair to say that ATVI stock investors are on the winning side of the trade.

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.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.

Article printed from InvestorPlace Media, https://investorplace.com/2023/03/atvi-stock-pops-as-u-k-eases-up-on-microsoft-activision-deal/.

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