What Happened: Microsoft is making an acquisition offer of $95 per share. Shares of Activision dropped further from Microsoft's planned acquisition price as investors grew apprehensive that the $69 billion transaction would be blocked by U.S. antitrust regulators. This includes the U.S. Federal Trade Commission, which is likely to file an antitrust action to stop the sale, according to a Politico report from last week.
The Morgan Stanley Analyst: Matthew Cost mentioned while it was challenging to assess the likelihood that Microsoft's proposed acquisition receives regulatory approvals, the company believed the risk-reward is compelling on a fully standalone basis.
Cost said the investment bank was incrementally bullish on Activision, with its position as a leading diversified gaming publisher and its strength across multiple platforms and genres.
Morgan Stanley upgraded Activision to an Overweight rating with a $95 price target.
The Wells Fargo Analyst: Even though the global antitrust environment is still "uncertain," Brian Fitzgerald changed his rating for Activision from Equal Weight to Overweight and maintained his $95 price target. He said the stock did not accurately reflect the company's potential.
Check out Activision's quote page for more analyst ratings.
Fitzgerald further stated that even at a modest 13.5 multiple to consensus 2023 EBIT forecasts, the stock is worth $76 per share and ATVI will receive a $3 billion breakup fee if the acquisition does not close.
ATVI Price Action: Shares of Activision are up 1.42% at $74.51 as of Monday morning at publication.
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