MSFT - Is It Too Late to Buy Activision Blizzard Stock?
Back in January, Microsoft (NASDAQ: MSFT) agreed to buy Activision Blizzard (NASDAQ: ATVI) for $68.7 billion (or $95 per share). Activision Blizzard's investors approved the deal three months later, while Warren Buffett's Berkshire Hathaway acquired nearly 10% of the video game maker as an arbitrage play.
For a while, it seemed like a good idea to follow Buffett's lead, since Activision's shares consistently remained below $95. But as of this writing, its stock trades at roughly $75 and the deal faces a growing number of regulatory hurdles. China's antitrust regulators rejected Microsoft's initial request for approving the deal, European regulators launched a new probe, and the U.S. Federal Trade Commission sued Microsoft to block the acquisition.
All of these regulators believe Microsoft's takeover of Activision would give it an unfair advantage in the video game market. Do all of those headwinds indicate it's too late to buy Activision Blizzard as an arbitrage play?
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Is It Too Late to Buy Activision Blizzard Stock?