So, Microsoft have offered $95 a share for Activision as we all know. It is currently trading at around $74 which makes it about 28.5% return if the deal goes through. Announcement by June.
The risk is of course the deal doesn’t go through, and at this point in time it looks very 50/50. However, how often do they actually stop these deals? And, as Sony are currently beating Microsoft in the gaming space, is it really unfair if it goes through? I can see with Microsoft’s lobbying powers that they d could get this through.
Now, the downside risk I work out at about 20% based on the levels it was trading at before the announcement. You will also still own a reasonable company so this is not a yolo.
The way I see it as 50/50 and more upside than downside, looks like a good play to me. Thoughts?
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