The world is watching Microsoft’s biggest acquisition, which is still in the works, but is sure to be controversial given the size of the transaction. Now it’s the turn of a Wedbush securities analyst, Michael PachterJoins Yahoo Finance Live for Microsoft-Activision Merger.
Pachter this time tried to show behind-the-scenes and market expectations, even the maximum date for final approval. Thus, a well-known analyst made the following comment:
It all adds up to the Microsoft acquisition. And I can confidently say this Satya Nadella is not Elon Musk. So he won’t turn down a deal and won’t look for a low price. I can safely say that The FTC has no legal basis to appeal this. They can try. And they really surprised us on Friday when they filed a lawsuit to block Facebook’s acquisition of the small company Within. Then Leena Khan shows she hates big tech.
But the crux of the challenge here will be that if Microsoft completes its purchase of Activision, they will be pulling games off Sony’s Playstation platform. And Microsoft has already blogged and said we won’t. We have contracts. Let’s respect them. What the FTC will likely do, and should do, is seek and agree to a settlement with Microsoft Consent DecreeDo not block the merge, do not process the merge block.
And the consent decree will say that We will not increase game prices or The cost of the console. And we will definitely continue Playstation support with Activision games. If they can do that, this deal will go through. So watch it October Because it is Nine months after the transaction. This is more or less when the FTC has to fish or cut the bait.
And if they don’t sue by the end of October, see Microsoft’s announcement that it will close the deal. by the end of the year. And then we’ll see what the FTC does. But I think this deal is closing. I think it closes at the latest January 15. And I think the price is $95, so that’s my target price.
Recall that according to Michael Pachter’s experience, the contract should be closed by October, when nine months have passed, but it can be extended until January 15. He believes the purchase will go through, but may have a consent decree.
Another interesting thing about Xbox Game Pass, which Pachter thought was a stupid idea years ago, but changed his mind:
So Microsoft had a vision years ago that I thought it was stupid, that they would create a subscription service and everyone would pay for the right to play. and They just didn’t have many games.
So they went shopping and bought six independent studios, the largest of them Obsidian. They are very, very good. But then they bought it BethesdaWhich is a giant studio and now they are buying it Active vision. When they are done, they will be The fourth largest American game publisher. So they will be giants And there will be an opportunity to really support your signature.
Their vision for the future is, let’s get rid of the console. Let’s use the cloud and deliver games to any screen. And that potential market is 3 and 1/2 billion people. So I don’t think they have that many subscribers, but Do they go from 25 million to 100 million? Yes.
as well as Disney bought Fox To support Disney+, they didn’t Fox movies from cinemas. They just put the catalog on Disney+ instead of HBO. And this This is a very, very smart strategy. Here’s where it goes, more free play. Activision is great for free to play. More than half of its revenue comes from free-to-play. So it’s a big, big opportunity for Microsoft to be good at that.
What do you think about the analyst’s statements? Comment below!