Kevin Kelly Has This Activision Options Strategy After FTC Votes Against Microsoft Deal

The $69-billion acquisition of Activision Blizzard Inc ATVI by Microsoft Corp MSFT is hanging in limbo after the FTC voted against the deal.

On CNBC’s "Options Action," Kevin Kelly of Kelly ETFs said that Microsoft’s acquisition of Activision has “got to be based off the fundamentals.”

“The most recent earnings from Activision was a beat” and its latest version of Call of Duty was the “fastest selling of that franchise,” Kelly mentioned. “It’s a great franchise that is going to come out with another edition next year,” he added.
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Activision has net cash on the balance sheet of about $9 per share, and this is expected to grow to $13 per share in 2023, Kelly stated.

The FTC’s complaint is “weak” because it is effectively saying that “Sony, which owns 70% of the hardware market, could be hurt by Microsoft’s Xbox having exclusivity to the Call of Duty franchise,” he said.

Activision has a strong pipeline, with "Diablo 4" set to be released next year, Kelly mentioned.

Activision’s stock “has a lot of catalysts behind it,” he added.

Kelly recommended buying the stock and the January 27, 77-calls.

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