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Monday, November 28, 2022

Activision Stock Falls After Report Says Watchdog Will Block Microsoft Deal

  • Activision shares fell 4% in after-hours trading Wednesday.
  • The Federal Trade Commission is weighing up filing an antitrust lawsuit to block Microsoft’s acquisition of the company, according to Politico.
  • Microsoft agreed to buy Activision for $69 billion in January.

Activision Blizzard shares fell in after-hours trading Wednesday after a report suggested regulators will try to block Microsoft‘s $69 billion deal to buy the video-game publisher.

Activision fell as much as 5.9% after the closing bell and were down 3.9% to trade at $73.60 at last check. The US stock markets are closed on Thursday on account of Thanksgiving. 

Politico reported Wednesday that the Federal Trade Commission is likely to try and block Microsoft’s $69 billion deal to buy Activision through an antitrust lawsuit, citing three people with knowledge of the matter.

The regulator is said to believe that acquiring ‘Call of Duty’ publisher Activision would give Microsoft and its flagship Xbox console an unfair advantage in the videogame market.

The FTC did not immediately respond to Insider’s request for comment.

The potential antitrust lawsuit could be bad news for those who bought Activision shares after Microsoft announced a takeover deal in January – including legendary investor Warren Buffett.

Buffett more than quadrupled Berkshire Hathaway’s stake in Activision to 64 million shares in the first quarter of this year, wagering that Microsoft would close its acquisition of the video-games company.

Berkshire still owned 60.1 million shares or 7.7% of Activision at the end of the third quarter, a stake valued at $4.6 billion as of Wednesday’s close.

Microsoft shares edged 0.4% higher to trade at $248.46 after the closing bell.

Read more: Warren Buffett says his team didn’t know Microsoft was planning to buy Activision Blizzard when they bought the gaming stock

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