Activision Blizzard Analyst Sees Its Deal With Microsoft Happening

  • Wedbush analyst Nick McKay assumed coverage on Activision Blizzard Inc ATVI with an Outperform rating and a price target of $95.
  • The analyst expects Microsoft Corp MSFT to close its proposed acquisition of Activision Blizzard over the next several months. 
  • At a high level, Microsoft must maintain the status quo within the video game industry through legally binding agreements that address game availability, pricing, quality, and release timing. 
  • Once the company has entered into such agreements, regulatory concerns around the potential for lessening competition should largely subside, paving the way for the deal's completion in relatively short order. 
  • There appears to be less concern from the investors whom the analyst spoke with about the implications of the deal falling apart for Activision Blizzard's share price. 
  • The analyst attribute that it has moved past the pandemic-related slowdown to development faster than its primary peers, as reflected in the high quality and intense performances of its FY22 releases and the significant potential of its FY23 releases.
  • The shares remain part of the Wedbush Securities Investment Committee's Best Ideas List. 
  • In January, Alphabet Inc's GOOG GOOGL Google and Nvidia Corp NVDA joined Sony Group Corp SONY in raising issues with the $69 billion deal, which the FTC opposed in December.
  • The FTC argued that the deal would impede competition in the video game industry and has scheduled an in-house trial for August.
  • Sony, whose PlayStation console competes with Microsoft's Xbox, has previously argued that it sees the Activision deal as anti-competitive.
  • Price Action: ATVI shares traded higher by 0.20% at $76.76 on the last check Friday.
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