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ATVI

Activision Blizzard NasdaqGS:ATVI Stock Report

Last Price

US$74.34

Market Cap

US$58.2b

7D

-0.8%

1Y

-5.3%

Updated

30 Sep, 2022

Data

Company Financials +
ATVI fundamental analysis
Snowflake Score
Valuation4/6
Future Growth2/6
Past Performance2/6
Financial Health6/6
Dividends0/6

ATVI Stock Overview

Activision Blizzard, Inc., together with its subsidiaries, develops and publishes interactive entertainment content and services in the Americas, Europe, the Middle East, Africa, and the Asia Pacific.

Activision Blizzard, Inc. Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Activision Blizzard
Historical stock prices
Current Share PriceUS$74.34
52 Week HighUS$86.90
52 Week LowUS$56.40
Beta0.51
1 Month Change-5.29%
3 Month Change-5.38%
1 Year Change-5.34%
3 Year Change34.09%
5 Year Change17.53%
Change since IPO367.99%

Recent News & Updates

Sep 30

Microsoft files planned Activision acquisition with European antitrust regulator

Microsoft (NASDAQ:MSFT) filled its planned $69 billion purchase of Activision (NASDAQ:ATVI) with the European antitrust authority. Microsoft (MSFT) filed with the European Commission for the Activision deal and the authority set a provisional deadline of Nov. 8 to make a decision on the transaction, according to a filing on the regulator's website. Developing story ...

Sep 22

17 Opportunities In Merger Arbitrage Space

Summary Merger arbitrage spreads are wide. Plenty of opportunities with 10%-53% spreads. Detailed review of all transactions in the space. Merger arbitrage is one of my favourite event-driven strategies for its proposition of straightforward binary outcome (easier to weigh the odds), relatively short timeline and, at least in my experience, frequent examples of market inefficiency. Moreover, with merger arbs the outcome of the bet is often little dependent on the general market movements/outlook, which also offers uncorrelated returns. However, when the market is turbulent, investors get scared and merger arbitrage spreads often widen significantly, despite no real change in transaction risks. Such times create interesting opportunities to enter and play on overblown spreads, e.g. as it happened earlier this year during the market fall in June/July. The good news is that we are at a similar situation again - the market turbulence is peaking and merger arbitrage spreads are wide again. Below you will find a list of 17 transactions with the widest spreads currently on the market with my quick takes on each situation and the reasons for the spread. Which of these transactions do I find to be the most attractive from the risk/reward perspective? Well, a big part of the list below are large-cap mergers of well-followed companies, so it's more likely that the outstanding spread fairly reflects the risks of transactions failing for one reason or another. In other words, there is no free lunch on most of the larger cap stuff. For this reason, I always prefer smaller-cap event-driven situations as in this area it is easier to find the edge and see why the market might be wrong. From the list some smaller names appear to be quite attractive including: (LOTZ) with 35% spread; (DMS) with 28% spread; (GSMG) with 11% spread; (CCHWF) with 10% spread; (VLNS) with 10% spread. Having said that, I find it also worthwhile to regularly review the heavyweight space as some interesting merger arbitrage plays might pop-in there as well, e.g. (ATVI) with a 26% spread or (TWTR) with a 31% spread. If you find this kind of compilation useful, drop me a line in the comments - I might consider making this into a regular post. Let's see how it goes. Below you will find a downloadable PDF as well as full descriptions of each merger arbitrage play. Silicon Motion Technology (SIMO) Buyer: MaxLinear (MXL) Consideration: $93.54 + 0.388 MXL stock Spread: 53% Exp. Closing: Q4’22 Main Risk: Chinese regulatory approval. International merger in the semiconductor industry. Approval from China’s regulators is the main hurdle here. The buyer is based in the U.S, while the target is a US-listed Taiwanese company with China being its largest market. China’s antitrust regulators have recently asked the companies to refile their merger documents – this is expected to delay transaction closing to mid-late 2023. Spirit Airlines (SAVE) Buyers: JetBlue Airways (JBLU) Consideration: JBLU: $34.15/share; Spread: 53% Exp. Closing: H1’24 Main risk: regulatory approval. An interesting bidding war saga in the U.S. airline industry that is slowly coming to an end. SAVE management was unable to gather shareholder support for the previously agreed-upon merger with ULCC and the transaction was terminated. Instead, SAVE turned to what seems to be a superior offer from JBLU ($34.15/share). The new buyer is clearly committed and has already sweetened the proposal several times during the course of the bidding war. Antitrust concerns are the main risk here and the second request by the DOJ has been issued. That being said, JBLU has proposed divestitures in overlapping areas – this could alleviate antitrust concerns. An important aspect here is JBLU’s Northeast Alliance partnership ((NEA)) with American Airlines. NEA has received pushback from the regulators, with a DOJ trial set for the end of September. SAVE-JBLU merger outcome might depend on the outcome of NEA trial. CarLotz (LOTZ) Buyer: Shift Technologies (SFT) Consideration: 0.69 SFT stock Spread: 35% Exp. Closing: H2’22 Main Risk: expensive hedging. The merger of equals between two used-vehicle e-commerce businesses. The merger is basically an equity raise for the buyer, however, the combination will also allow SFT to enter East Coast markets. Shareholder approvals shouldn’t be a problem as two major shareholders of LOTZ (25% ownership) are in support. The main issue is hedging – borrow fees are volatile and expensive at 35%. There is also a minimum net cash condition, but it shouldn’t be a problem if the merger closes with no delays. Twitter (TWTR) Buyer: Elon Musk Consideration: $54.2/share Spread: 31% Exp. Closing: 2022 Main risk: unfavorable litigation outcome. Elon Musk is backing out of the merger and forcing TWTR to file a lawsuit. Both parties are now set to meet in Delaware court on October 17. Musk has continuously claimed that TWTR understates the percentage of bot accounts on the platform. However, merger contract terms seem very strict making it a pretty compelling case for TWTR. The judge’s actions so far, including granting TWTR’s wish for an expedited trial, suggest this might very well be true. A wildcard here could be recent revelations of former TWTR security chief turned whistleblower, however, it is not clear if that will be enough to trigger the MAC condition. Likely outcomes include either deal termination ($1bn fee paid by Musk) or specific performance – $33.5bn in equity commitments paid by Musk. Another possibility is that both parties eventually settle at a lower price given a broader market sell-off since the acquisition announcement. TWTR stock price has rallied as the litigation seems to be proceeding in TWTR’s favor so far. However, the spread to the initial offer remains wide. The wide spread can also be partially explained by the substantial downside – TWTR's share price is likely to fall below $15-$20/share if Musk is allowed to walk. Digital Media Solutions, Inc. (DMS) Buyer: Management Consideration: $2.5/share Spread: 28% Exp. Closing: TBD Main Risk: buyer walking away or board’s rejection. Non-binding privatization proposal from management. The board is currently reviewing the proposal. The buyer group owns over 73% of class A shares (for which the offer is made). Financing is apparently nearly-secured. The offer comes after a year-long strategic review. DMS is a failed SPAC with limited view available into the business (online marketing solutions). Buyers are ex-sponsors. The acceleration of share registrations after the proposal announcement is somewhat alarming. The proposal comes at a 2x premium, so the potential downside could be very material. Shaw Communications (SJR) Buyer: Rogers Communications (RCI) Consideration: $32.4/share Spread: 28% Exp. Closing: H2’22 – H1’23 Main Risk: regulatory approval.

Sep 09

Activision Blizzard sets 'Call of Duty' franchise event

Activision Blizzard (NASDAQ:ATVI) has set an event to reveal details on its Call of Duty cash-cow game franchise. The publisher's Call of Duty: Next event next Thursday, Sept. 15, will include revealing multiplayer action and the multiplayer beta program for its upcoming holiday entry Call of Duty: Modern Warfare II. It will also highlight the new Call of Duty: Warzone 2.0 and a mobile version, Call of Duty: Warzone Mobile. Both of those are scheduled to roll out slightly after Modern Warfare II (due out the evening of Oct. 27 in the U.S.). Live broadcasts will begin at 1 p.m. ET on Thursday and be followed by live gameplay session streams through channels including YouTube, Twitch, Twitter and Facebook. It's been 19 years since the company released the first Call of Duty game, and it's become the most successful U.S.-born videogame franchise, having sold several hundred million copies.

Aug 23

What Will Microsoft Lose If The Activision Blizzard Deal Collapses?

Regulators have reasons to block Microsoft's deal with Activision Blizzard or put forward their own demands. If the deal fails, Microsoft will lose a very important building block for building the metaverse. Microsoft's strong position in the gaming market will not be that strong without Activision Blizzard. Call of Duty would be a brilliant addition to Microsoft's gaming ecosystem. This deal is too big to lose for Microsoft. Introduction A month ago I published an article called "Activision Blizzard: What If The Microsoft Deal Fails?" The main thesis was all about Activision Blizzard, Inc. (ATVI) as an independent company given the uncertainty about the future of the acquisition. This article will be a kind of continuation of the previous one, but here I will be discussing Microsoft Corporation (MSFT) without Activision in its gaming segment and, more importantly, what Microsoft will lose if the deal collapses. Let's not pretend there are no risks It is very important to understand that the success of closing such a deal can never be guaranteed. All because of the size of the acquisition. I believe that this is the biggest tech acquisition we have ever seen. The only M&A close to Microsoft-Activision Blizzard was the Dell (DELL)-EMC Corp deal with a transaction value of $67 billion. chart by author Thus, this takeover cannot but arouse interest from regulators. Microsoft needs approval from three regulators: FTC, CMA, and European Commission. by author Microsoft can be asked very uncomfortable questions. There likely will be concerns about the situation with the availability of Activision games on the competitors' platforms, like Sony's PlayStation. Some records show Microsoft saying that it has no plans to make these franchises exclusive since PlayStation users account for a large share of Activision's revenue. However, I don't think it's all about short-term success as the platform war is still going and gaining momentum. New games in Microsoft's gaming segment could follow the path of Bethesda's projects (Redfall and Starfield will only be available on Xbox and Windows). Microsoft could have gone the other way, such as providing early access to Activision Blizzard games. It may also raise questions from regulators. Exclusive content will help build a huge community for Xbox, and Microsoft won't be able to resist this opportunity. The bottom line is that regulators will act differently in this situation. All previous Microsoft deals went almost unhindered, and perhaps this time the regulators will decide to ruffle the nerves of the corporation and put forward their own conditions. The metaverse This acquisition will become one of the building blocks of Microsoft's metaverse. The corporation releases its own Xbox consoles and has its own cloud platform and a VR headset project, so now it needs to create its own content and Activision Blizzard will help it with this. Video games will play a central role in the metaverse as they already provide immersive 3D graphics and virtual reality experiences. Players can create content themselves, share it with others, interact and communicate in virtual space, use digital assets, and create digital copies of themselves. Activision Blizzard, contrary to the opinion of many, is an excellent metaverse play. It's not so much about the games themselves and their integration on modern platforms, but rather about the franchises and brands that the company owns. Users, trying to entertain themselves in the metaverse, will first of all turn to brands they already know, like Call of Duty, Overwatch, Diablo, and WarCraft. The corporation lacks strong brands with huge local bases, ready to follow their favorite games anywhere, even in the metaverse. Considering that Microsoft already has Minecraft with 141 million active users, Activision Blizzard will automatically make the company the king of the metaverse, at least in the entertainment segment. However, if the deal does not go through, then the idea of ​​creating a metaverse in the form in which it is presented by Microsoft will evaporate. The company will lack unique content and will match other game companies with only a couple of their own game projects and nothing more. A strong position in the gaming market Video games are the largest, most popular, and fastest growing form of entertainment content, with a global audience of 3 billion, and through this transaction, Microsoft intends to participate in the growing gaming business. The global gaming market is projected to reach 3.32 billion users by 2024 and could grow to 4.5 billion by 2030 due to increased interest in immersive content, virtual worlds, and new experiences, according to Microsoft. newzoo Based on revenue in 2021, Microsoft will overtake Sony Group (SONY, [[SNEJF]]) to become the world's second largest gaming company, behind only Tencent ([[TCEHY]], [[TCTZF]]). newzoo Microsoft is set to increase its share in the gaming market by 64.6% with Activision Blizzard in its gaming segment. chart by author However, unlike Tencent, Microsoft will own franchises that will have a loyal customer base 10 years from now, not the games whose hype is likely to fade away in a year. If the companies will end up going separate ways, then Microsoft will lose a huge market share in the first place, and more importantly, the resources necessary to further capture the market. Thus, Microsoft will be a few steps away from being completely defeated by Sony's closest competitor in the platform and content war. Call of Duty Call of Duty remains the main Activision Blizzard asset with over 425 copies sold. In a couple of years, Microsoft could pretty much own the second most popular franchise in the world. TweakTown (June 2022 data) Call of Duty has about 100 million active monthly users (as of the first quarter of 2022). At the same time, 42.1% of all users play on PlayStation, while only 25.6% play on Xbox. If Microsoft can pull at least 2.5% of all Call of Duty players from a competitive platform to its own, then this will increase the number of active Xbox users by 1 million. TweakTown The franchise will get a new round of development thanks to the resources of Microsoft, and Microsoft itself will receive an incredibly loyal 100 million players.

Aug 16
Activision Blizzard's (NASDAQ:ATVI) Price Implies Some Positive Expected Value From M&A

Activision Blizzard's (NASDAQ:ATVI) Price Implies Some Positive Expected Value From M&A

Activision Blizzard, Inc. (NASDAQ: ATVI) made the headlines in January when it announced the largest M&A deal of the year. While the broad market experienced a correction, the magnetic pull of Microsoft's US$95 per share offer kept the stock from falling. Since then, the company reported few unimpressive earnings results, but the only thing that could endanger its position is the M&A deal falling through.

Shareholder Returns

ATVIUS EntertainmentUS Market
7D-0.8%-1.4%-2.5%
1Y-5.3%-52.0%-23.2%

Return vs Industry: ATVI exceeded the US Entertainment industry which returned -50.8% over the past year.

Return vs Market: ATVI exceeded the US Market which returned -21.5% over the past year.

Price Volatility

Is ATVI's price volatile compared to industry and market?
ATVI volatility
ATVI Average Weekly Movement1.9%
Entertainment Industry Average Movement9.1%
Market Average Movement6.9%
10% most volatile stocks in US Market15.6%
10% least volatile stocks in US Market2.8%

Stable Share Price: ATVI is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 2% a week.

Volatility Over Time: ATVI's weekly volatility (2%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
n/a9,800Bobby Kotickhttps://www.activisionblizzard.com

Activision Blizzard, Inc., together with its subsidiaries, develops and publishes interactive entertainment content and services in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company operates through three segments: Activision, Blizzard, and King. It develops and distributes content and services on video game consoles, personal computers, and mobile devices, including subscription, full-game, and in-game sales, as well as by licensing software to third-party or related-party companies that distribute Activision and Blizzard products.

Activision Blizzard, Inc. Fundamentals Summary

How do Activision Blizzard's earnings and revenue compare to its market cap?
ATVI fundamental statistics
Market CapUS$58.16b
Earnings (TTM)US$1.88b
Revenue (TTM)US$7.64b

31.0x

P/E Ratio

7.6x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
ATVI income statement (TTM)
RevenueUS$7.64b
Cost of RevenueUS$2.15b
Gross ProfitUS$5.50b
Other ExpensesUS$3.62b
EarningsUS$1.88b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)2.40
Gross Margin71.90%
Net Profit Margin24.57%
Debt/Equity Ratio19.8%

How did ATVI perform over the long term?

See historical performance and comparison

Dividends

0.6%

Current Dividend Yield

20%

Payout Ratio