IMPORTANT POINTS:
- The possible acquisition of Activision Blizzard may be a catalyst for greater performance for Microsoft.
- Pending approval by the CMA, which could result in the sale of some game rights to Ubisoft.
- Microsoft shares continue to show an upward trend throughout the year, with a valuation of more than 31%.
The year 2023 has seen a notable boom in Microsoft (MSFT) stock, far outperforming the S&P 500 market index. A variety of factors have fueled this rise, however, the impending acquisition of Activision Blizzard (ATVI) is presented as a catalyst that could further raise investor expectations.
A crucial factor in this performance has been the rise of the Artificial Intelligence (AI) landscape, with innovations such as OpenAI’s ChatGPT and Alphabet’s Google Bard capturing the global imagination.
MSFT’s run may not depend solely on the rise of AI, however, as it moves closer to a historic deal.
Heading towards a historic acquisition
The tech giant is about to clear its final regulatory hurdle to acquire video game development giant Activision Blizzard, a government statement revealed on September 22. After a year and a half of anticipation, recent indications from UK competition authorities suggest approval of the latest concessions, potentially paving the way for Microsoft’s historic $69 billion purchase of Activision, marking the largest transaction in the gaming industry to date.
Under the terms of the new offer, Microsoft would sell some gaming rights to French video game publisher Ubisoft, a move the regulator said could keep competition in open cloud gaming going for years.
“This is a new and substantially different deal, which keeps cloud distribution of these important games in the hands of a strong independent provider, Ubisoft, rather than under the control of Microsoft.”Colin Raftery, senior director of mergers at the CMA.
The CMA added that it will continue to review the offer until October 6.
Microsoft stock price
At press time, MSFT price stood at $319.53, down 0.39% in the last 24 hours. On the weekly and monthly charts, the stock fell more than 5.7% and 1.8%, respectively. However, so far this year, Microsoft shares have risen more than 31%.
Currently, the stock is trading below the 100-day moving average (MA), which acts as resistance in case the bulls try to attack the $330 mark again. The trend now favors downside, with the next support located in the $305-310 range.
The latest developments regarding the Activision takeover represent a notable turn for a deal that was once considered impossible after the Redmond, Washington-based company faced significant resistance from antitrust regulators, including an initial veto . by the United Kingdom at the beginning of the year.
Now, Microsoft has never been closer to completing its blockbuster acquisition of Activision Blizzard, the company behind some of the most popular video game franchises like Call of Duty, World of Warcraft and Overwatch.
