Activision Blizzard Inc
Yeah but as a gamer specifically I am concerned with Blizzard which has been on a decline for years. If Microsoft can buy this company maybe they can finally get out of their rut and make good games agains. On the money side I got a lot of ATVI stock so let’s go money train!
With the SPY, pretty much guaranteed, the spread is so tight. if you have symbols that dont have a lot of eyes/volume, then you'll end up with larger spreads which make it not worth it because to get out you'd have to sell at the bid. Take a look at the 19Jan'24 Options for ATVI (I own $75 strikes on this date)....you'll notice that theres like a $1.50 difference between the bid and the ask at that strike (some strikes provide wider or narrower gaps) If you bought for 12.00(what the ask is as I type this), you'd be requiring the ask went to $13.50 and the Bid to $12.00, while it currently sits around $10.50...just to break even...that is not something you'd want to do whats being talked about here on. I own my $75 Calls because I paid $10 for them and with ATVI being bought by Microsoft for $95/share, it works out to me paying $10 today to guarantee my right to buy ATVI at $75 from now until Jan'24(which is after the sale date) so...if they do get bought out, the full step-by-step walkthrough is "I cash in my calls, pay $75/share, and then get paid $95/share, taking into account the $10/share I paid for the option, I functionally profit $10/share. What will really happen is I will sell my contracts for like $18 a few days before the Microsoft deal closes and I'll have made 80% on the investment in like 10months" "Why wouldnt you just buy the shares then and profit the full $20/share?" Good Question. 1. I just said I'd make 80% on my investment, If I had to actually pony up $75/share to make $20/share, I'd only be making 26% 2. I bought 4 contracts, that represents 400 shares, I dont actually have $30k I want to drop into ATVI...because "what if they dont actually get bought out?"...If they're suddenly worth $50/share, I now only have $20k... What I do have though, is $4000 I'm willing to risk on this buyout. but if I bought shares, I could only buy 53 shares...$75x53=3975, 53x$20=$1060... $10x400=4000, $20x400=8000 3. I could get a slightly better deal and pay a bit less money buying June'23 contracts (that should still be for "after" the deal is set to happen, but delays are a potential factor, so I figured I'd pay a bit more of a premium to protect myself against that risk (cuz if it gets pushed to Q3 '23, then those June Options will probably still net you a profit...but less than being able to hold on waiting for the full $95 price.
I've decided to cut my stake of ATVI Jan 2024 $80 leap calls by about half. There is no actual logical reason to stop the merger, but I think there is increased risk of a political interference US showdown. My opinion on the two warring factions being: 1. The FTC chair, [Lina Khan](https://en.wikipedia.org/wiki/Lina_Khan), known for 'Amazon's Antitrust Paradox'. She is backed by the Elizabeth Warren far-left wing of the dems. For reference, Warren recently popped out the [Anticompetitive Mergers Act of 2022](https://www.warren.senate.gov/imo/media/doc/Summary%20of%20Prohibiting%20Anticompetitive%20Mergers%20Act.pdf) featuring such illogical never-gonna-pass-things like banning all mergers over $5B. 2. The 2 Democratic senators of Washington State: [Patty Murray](https://en.wikipedia.org/wiki/Patty_Murray) and [Maria Cantwell](https://en.wikipedia.org/wiki/Maria_Cantwell). Washington state being the home state of Microsoft, who employs a lot of voters, whereas Sony HQ is located way outside Voterville. Even if Dems take Georgia to get 51 total senators, those 2 Wash senators would still have the swing vote on omnibus bills, to make their support conditional on MSFT/ATVI merger approval. They have both advocated for MSFT in the past. The logical approach would be to force MSFT to guarantee crossplatform games for foreseeable future, but I feel logic seems to give way to political gamesmanship. My impression is that Buyden would have to try to appeal to both wings of his party. So illogical things happen, with the FTC suing to put in an injunction to stop the merger and then possibly drag it out past my Jan 2024 call date.
Your entire "DD" sounds like you just discovered Steam, or you are bagholding one of the companies. Steam is a direct competitor to Microsoft Store, I don't know how you think MSFT would benefit from it when Microsoft Store is doing so shit that MSFT gave up and listed some of their top games like Microsoft Flight Simulator and Minecraft Dungeons on Steam. NVDA is going to eat shit next quarter, their 4000 series aren't flying off the shelf because of all the scandals and shitty engineering, scalpers are struggling to get rid of the 4000 series cards they hoarded. EA and ATVI are some of the most hated gaming companies for consumers on steam, and their event sales are usually one of the lowest. EA is carried by Apex, and ATVI by COD. Both's recent future guidance is dog shit and was already talked about recently. PS5 is doing so bad that SONY went back on their words and started listing console exclusive on PC. Also, Steam is essentially a gamers' equivalent of booze and hoes, top selling games are either triple A games by a big publisher, porn games, or skimpy weeb games by Koei-Tecmo/Capcom/Square Enix. [Top 5 games with the most concurrent players are literally f2p on cosmetic/battle pass system](https://steamcharts.com/). Your post would make sense last year or 2020, not now where all of them are going to take a hit due to economy situation.
Buffett was never a great investor. Just take a look at his recent picks like ATVI, Delta, or precision cast parts. He only succeeded because of insurance companies. That’s really it- an industry that the government forces people to pay.
Ya, I sold some of my shares on the bounce, but kept majority of them in case they kept running, plus I figured I can just average down if I need to. I feel like I’m in a pretty good position no matter which way the market goes. ATVI is my only real wildcard right now.
Hindsight Trading weekly total- (somebody correct my math)- $100 into MMS calls up 1433% on Tuesday. = $1433 $1433 into COUP $50 calls up 11,633% Wednesday = $166,700 $166,700 into ATVI $75 puts up 8350 % (shortly after open) today = $13,919,524
Apparently it's not just Sony fighting the MSFT-ATVI deal. Google is pissed because it is claiming Microsoft is degrading game pass quality of chrome is used. Biden has a progressive until in office at the ftc. This thing is looking increasingly fucked.
Quick question if I may about the ATVI - MSFT deal. Let's just say that the deal is actually approved ultimately, would shareholders of ATVI get the option of converting their ATVI shares to MSFT shares on that day? For example, if MSFT was trading for $285 per share at that time, you'd get 1/3rd of a share of MSFT for every ATVI share you had. Or, are you required to just get a cash settlement in your account, and that's it? Reason I'm asking, is because it seems sort of weird to me that recent buyers of ATVI would basically be forced into a short-term trade. I know the exact same thing happened to recent investors in Twitter. They had no ability to continue holding the investment. I'm just wondering if an ATVI shareholder could continue to hold this investment without generating a taxable event
FTC suing to block MSFT acquisition of ATVI. That arb play not going to work I guess. Intrinsic value of ATVI is $47.37 right now. Would be nice to sell at 90 at that valuation but it may not happen. Europe hasn't even done their own due diligence yet if Im not mistaken.
>No, I don't think ATVI is a good short now that the buyout deal is uncertain. The reason being that if the FTC does sue to block Microsoft's purchase of Activision Blizzard, it's likely because they believe that the deal would be anticompetitive and hurt consumers. However, I believe that Microsoft would ultimately prevail in court and be allowed to go through with the acquisition. Therefore, I think there's more upside potential for ATVI than downside risk at this point.
>ACTIVISION BLIZZARD SHARES DOWN 4% PREMARKET AFTER REPORT SAYS FTC LIKELY TO FILE LAWSUIT TO BLOCK MICROSOFT BID FOR CO $MSFT $ATVI ^\*Walter ^Bloomberg ^[@DeItaone](http://twitter.com/DeItaone) ^at ^2022-11-25 ^05:28:36 ^EST-0500
I believe the individual you initially responded to was simply pointing out that the stock price has decreased since the FTC news broke. You asked a very specific question: "why compare it to $95?" The answer is "to illustrate the difference between the market value and the price Microsoft is going to enter into". I do see the point you are making, though. I believe ATVI is actually up in value since the acquisition news broke in January.
Pre-acquisition announcement ATVI was a good buy (even now it’s decent one) - but Berkshire’s ATVI purchase pre-Microsoft announcement was pretty small and done by one of Buffet’s generals. It was only after the Microsoft acquisition announcement that Buffet himself got involved and bought more and made it a fully fledged position. In a Berkshire shareholder meeting he admitted he doubled down because of the arbitrage opportunity.
Buffet opened his position before the deal was announced. You could argue that he knew the deal was going to happen, but no one knows. When the price fell, ATVI PE became attractive for a value investor like Buffet. People hate on ATVI, but they still print money.
Tbh ATVI isn’t a bad buy at current valuation and that’s probably what tipped Buffet into going through with the arbitrage - deal goes through it’s a win, deal doesn’t and, with his cost basis, it’s a decent, undervalued company in a growing industry so still win (but less so).
Nah, its probably going to pass even if the lawsuit is real. PlayStation and Nintendo are bigger platforms in NA and EU than Xbox. Also Xbox faces big competition in the PC sector from Valve and Epic and others. Xbox getting ATVI does not warrant an anti-trust block.
MSFT or someone might have leaked this to put pressure on the other party to negotiate. Successful? No idea and if you are holding the stock, then you probably need to take a step back and consider it in the context of your entire portfolio. What's ATVI worth without the buy out? And obviously the upside from your cost basis. Buffett recently reduced his stake but could just be rebalancing.
How can regulators accuse MSFT of being a monopoly by saying they might make ATVI games only available on Xbox, when Nintendo and PlayStation are bigger than Xbox and do the exact same thing with their games? I think the deal will go through.
Here [https://www.ftc.gov/policy-notices/open-government/data-sets](https://www.ftc.gov/policy-notices/open-government/data-sets) Granted, I only skimmed it looking for big name injuctions. None of the ones I looked at seem to be on the same level as the ATVI/MSFT one
If Buffet is really the insider people think he is, he wouldn't have been selling his holdings every day right before the Fed announced it was going to print billions during the pandemic. Selling 12% of ATVI for him could just as well mean he found somewhere better to put that money into or maybe he figured ATVI getting out of China increased its risks or a myriad of other things.
The number of morons who love to think in conspiracy theory is just too much. After this announcement, ATVI went to $73.49 in after-hours, which is still very much in its trading range since the merger news came out. If Buffett trimmed recent, he would have done so at an even lower price than $73.49. So if he has insider info, he sucked at using it. And who told you that Buffett reduced his position a week ago? Or do you not know how to read 13F? The date of report for 13F is NOT the date that the trades were executed. Newsflash, start doing real and thorough research and stop jumping to conclusions without evidence. Who knows. Your portfolio might even benefit from a little bit more research.
When you read or hear him talk about the 2008 financial crisis, you realize he (and Berkshire) are an extension of the government (Treasury/Fed Reserve) and they go to him when the law won’t allow them to do certain things. Buffett is THE ultimate insider. Now, if he’s still holding on to a core position, you can bet your ass the FTC would take that into consideration and it means they’re putting on a show just to appear they care about anti-trust. If we find he dumped his ATVI stock, the deal is not going through. If he holds on, you know it’s all a show and the deal will in fact go through.
ATVI is getting killed after hours. Politico says the FTC is likely to try to block the merger with MSFT. Source: [https://www.marketwatch.com/story/activision-stock-falls-after-report-of-likely-ftc-antitrust-lawsuit-against-microsoft-acquisition-01669248147?siteid=mw_robin&mod=mw_RHF](https://www.marketwatch.com/story/activision-stock-falls-after-report-of-likely-ftc-antitrust-lawsuit-against-microsoft-acquisition-01669248147?siteid=mw_robin&mod=mw_RHF)
A few reasons why I'm optimistic the deal will go through: 1. Microsoft will still be smaller than Sony in the video game industry, who is the most vocal critic of the acquisition. 2. Can't be anti-competitive if Microsoft already made it clear they'll make Call of Duty available on all platforms 3. Can't be anti-consumer either since a lot of ATVI's games would be on Game Pass for free compared to spending +$70 for the base game 4. The deal brings a management change that will improve ATVI's work culture that has been stirred with scandals. If anyone blocks this, they're willing to accept Bobby Kotick will lead the company.
GE, INTC and Orbital Science. Bought 50 shares of all three the day I turned 19 in 2003. Added to them all over the years but currently only add to Intel. GE has been a waste, Intel has been fantastically great and Orbital Science got bought out by Northrup Grumman a few years back and I got a hefty, hefty premium cash price. Now, it's all about ATVI (since 2014), IRM (since 2015) and unfortunately RIOT (since 2017). I'm just waiting on that Activision payout from Microsoft a la Orbital. Then I'll move onto something else. Probably just more ETFs though.
Why? I don't think it's likely but looking at the rules both in EU and USA the MS - ATVI deal should be much harder to get past regulators than a hypothetical Apple - Disney merger. They're hardly even competitors, if you merge the user bases of Disney+ and Apple+ it would still be smaller than Netflix or Prime (and Apple+ is in single digits anyway). Does Disney have anything similar to iTunes because I really can't think of any other products that overlap in anyway...
Update for anyone in ATVI arb play: * NYT reporting this morning that [MSFT upped offer to 10 years](https://www.nytimes.com/2022/11/21/technology/microsoft-activision-deal.html) for Call of Duty on PlayStation * A [non-paywalled article](https://www.dexerto.com/call-of-duty/xbox-reportedly-offers-sony-10-year-deal-to-keep-cod-on-playstation-1991645/) about the NYT one
>1. I like $EA and $ATVI for their strong portfolios of sports games. 2. For hardware, I like $CRSR and $E2N for their focus on peripherals and sim racing respectively. 3. Other stocks that could do well in the e-sports space include betting companies like $DKNG and teams like Cloud9 ($C9).
well, Microsoft has to pay $3B breakup fee if buyout falls through even if just ban by EU or UK or whatever agency .. regardless .. so it is win-win for Activision anyway ... $3B is $4.5 cash per share added just like this to the company ... with current price of $73-ish just the fee represent more than 5% of added real value .. considering ATVI is net positive balance sheet is no brainer to own it ... the only problem with buyout falling through is Bobby dragging the company, that is the drama actually ... if Bobby resigns today , no buyout nothing, just because, stock will shoot $10 the next day
With $7k you can sell $70 strike puts on OXY or AMD. Single contracts only. You can wheel those if you like em. You can try ATVI $70 puts as the price seems pinned between 70-75 before the MSFT buyout happens (or doesn't). Those would be my picks. But good luck. You won't recover that $90k anytime soon. I would try to look at this like starting over with a clean slate and an ACTUAL strategy in mind instead of just gambling (trust me, been there myself).
The Buffett strategy is interesting: * Bee positions often are underpriced to start with * But he is a man of his word, and if drops will just buy more, giving a floor to price * I bought TSMC first on his buy, will do research later. Already had some PARA. Am long ATVI LEAP calls
When it was at 60$ the whole market was at extreme bubble levels, except ATVI which was in a bad shape due to harassment lawsuit basically. Basically what I am saying the 60$ level is the "crashed level" for atvi, it will probably go to there again without the deal
I don’t believe that Candy Crush is the big item. It’s Call of Duty and other aspects of ATVI. Hell, they are trying to build better relationships with gaming companies. Owning Spyro, Crash, and other IPs will force Sony to work with Microsoft more. Microsoft’s goal is 100% to move away from consoles and get Gamepass on everything… TVs, PlayStations, Nintendos, Laptops, smartphones, etc. With the risk stated, IMO even if ATVI buyout falls through… ATVI is very well positioned especially with CoDMW2022 is the fastest selling COD ever (beating a 2011 game). That’s not including Warzone2.0 coming shortly along with Blozzard products. The only issue I see if this merger falls is Bobby Kotick staying in charge and that’s because of the work environment problems. Win/win imo.
Thank you for this. The other consideration is that while I don't know this is necessary probable, they could have shifted some of those shares to call options. This could make sense based on their view and pricing for the contracts. I don't see a level of granularity of inflows for ATVI specifically in their financial statements though, so it's just conjecture.
You should get your facts straight. The FTC sued to blocked the NVDA/ARM deal. [https://www.bloomberg.com/news/articles/2021-12-02/u-s-sues-to-block-nvidia-deal-for-chip-designer-arm](https://www.bloomberg.com/news/articles/2021-12-02/u-s-sues-to-block-nvidia-deal-for-chip-designer-arm) That deal was never going to go through - it was always seen as very anti-competitive. [https://fortune.com/2022/02/07/nvidia-drops-acquisition-arm-chips-softbank/](https://fortune.com/2022/02/07/nvidia-drops-acquisition-arm-chips-softbank/) "Arm’s value has always been its neutrality, something that SoftBank, which doesn’t compete with any of the technology’s customers, was able to maintain. When Nvidia announced the deal, concerns grew that either its value would be destroyed by the change in ownership or opposition would scuttle its chances of getting signoff from governments around the world." You can't compare that deal to the MSFT/ATVI one. I believe that deal will go through as it should increase competition, especially in mobile gaming as MSFT would start competing against Google and Apple's app stores. [https://www.theverge.com/2022/10/19/23411972/microsoft-xbox-mobile-store-games](https://www.theverge.com/2022/10/19/23411972/microsoft-xbox-mobile-store-games)
I never was at that valuation. I have strict rules for myself not to buy anything long-term where the financials don't support the stock price, and I'm not allowed to override that with "growth" arguments. Only form of short-term plays in stocks I'm doing is the occasional takeover arbitrage play (I have some ATVI, and I made +50% with Twitter).