Gossip! What did I miss?
-
Ever wanted an RSS feed of all your favorite gaming news sites? Go check out our new Gaming Headlines feed! Read more about it here.
Bloomberg: Wall Street Is Betting That Microsoft-Activision Deal Will Fail
- Thread starter Biosnake
- Start date
- Status
The current 1 year treasury yield is 2%. Assuming the deal closes one year from now, and the deal is guaranteed to pass (meaning the treasury rate is the appropriate discount rate) the stock price today should be $93.
The QQQ has declined 15% since the deal was announced. Assuming this is the correct ratio for Activision (probably a bit optimistic) the stock price today would be $55.
With the current price of $76.39, that suggests a 56% chance of the deal going through. A bit more pessimistic than Hoeg.
The QQQ has declined 15% since the deal was announced. Assuming this is the correct ratio for Activision (probably a bit optimistic) the stock price today would be $55.
With the current price of $76.39, that suggests a 56% chance of the deal going through. A bit more pessimistic than Hoeg.
The math is good and sound but using stock price like this is pure divination.
User Banned (3 days): Antagonising other members
Nothing new for Bloomberg/Schreier style, especially when the topic is Xbox related.
lol for those who follow the stock market, this kind of fear-mongering and drumming up unnecessary excitement in financial news is nothing new
It was a poor article. People that wanted to make a quick buck already did when the stock jumped from $65 and change to $82.
If the Federal Reserve is talking rate hikes (small increments at a time) and some politicians are talking about higher rates to combat inflation, why would anyone be thinking about selling stock for tiny increments when there is a guaranteed payoff in a year or so?
If you are buying at above $75, you are looking to cash from Microsoft which current shareholders can already accomplish. There is a reason why the stock has gone absolutely nowhere since the mid January highs, and a reason why it has not tanked immensely even with the earnings. People are sitting on the stock for the most part.
Plenty of mergers fail for many reasons. While I think this one will go through it is dumb to think that acquisitions that have been announced always go through: List of largest failed mergers.
I'm by no means an expert on this stuff, but I believe you need to consider inflation as well.
People trying to shit on Jason, and even using a weirdo gamer-gater as source to do so, is the least surprising thing ever.
I did, by discounting the offer price using the 1-year treasury yield. By definition, the Activision stock price reflects all inflation considerations.
It's just a bit strange that Jason didn't mention other things like the overall market being down, Activision recent report, a war, and inflation.
I think Jason is the best gaming reporter in the biz but I don't see anything wrong with questioning the analysis.
To be clear - are you saying the market believes inflation will be 2% until the merger?
Like I said, I'm not an expert.
One is a merger lawyer by profession and the other is a gaming journalist. You obviously take the word of the lawyer when it comes to the nuance of a merger. Not that Hoeg Law isn't capable of being wrong about things, even merger related.
Let's not exercise Jason here, his article is poor on a technical basis.
Yeah, I just read about this a few minutes ago.
Wild times.
This too. I keep repeating how even tho Google was able to fully buy Motorola, they eventfully sold them. Not saying anti trust concerns was the only reason, but I wouldnt be shocked if it was a reason.
These 2 things combined have me giving some ppl in this thread a fucking massive side eye.
As somebody who is invested in $MSFT stock, it is in my best interest that this deal go through. Let's get it boys!
And if you know that lawyer's history you would know they had some questionable takes about Apple vs Samsung; Google vs Oracle lawsuits.
The last part of your post hits the nail on the head.
No, the current risk free 1-year rate is 2%. Using TIPS, the market expects inflation will the 5% over the next year, so the real rate is -3%. Regardless, if you want to guarantee you do not lose capital over the year, the return is 2% which is almost guaranteed to be less than inflation.
Edit, regardless the MS offer of $95 is not increasing with inflation, so 2% is the correct discount rate.
The overall market being down (which is basically war and inflation) is a reason this guaranteed large profit opportunity should be even more attractive to investors than it was in January, but for some reason it isn't.
Activision's earnings reports have little to no bearing on the price action here, when the $95 sale price is locked in.
I like Jason, a lot, but it is pretty clear that the article is a reach or maybe the guy just doesnt know how the stock market works.
I skimmed most of that list and interesting barely any of the failures were due to preventing competition/ creating monopolies.
You can choose between getting paid. 95 usd pr stock or get them converted into Microsoft stocks.
It's still a long way away. As time goes on that difference might shrink. There's always uncertainty but the merger is still over a year away if it happens.
And you wonder why Klobb or others rarely post here anymore.
People keep posting comments like this as if it's a clever point but apparently don't look at the contents of the list. The bulk of failed mega-mergers are in pharma, telecoms and manufacturing industries with much clearer indices of market capture.
The proper comparison is to similarly situated tech and entertainment companies, and frankly idk how even the FTC can look at its own review of Fox/Disney and the specifics of this deal and somehow deduce a different result given the markets involved absent a rapid sea change in their approach or the underlying law.
You don't understand, somebody said something mean about their favorite toy. Totally justified.
OP
OP
I mean, if it bugs you so much - don't follow them on twitter. Sounds like a you issue to be honest.
Yeeeeeah a T14 grad with nearly a decade of biglaw experience ending up in solo practice regularly posting YouTube videos is probably an indication of some major personality issues.
i don't really care if it goes through or not, but i do think it would be really funny if it didn't
It'll be nice to get the shareholder vote over with today so the deal will be one step closer to going through and we can stop getting clickbait articles like this.
Basically this. It's all starting to get to a point where the the reactions to stuff happening is more interesting than the actual thing happening.
I'm more worried about your mental wellbeing since "the corporate bootlicker" seems to live rent free in your head.🤡
Thanks. I didnt know this. Hard to keep track of everyone to be fair. I removed it.
- Status