Activision took this week to drop a couple of big pieces of information about the company's future. Most importantly, we learned about the fate of the company's acquisition with Microsoft.
Microsoft clears next hurdle
In January, Microsoft and Activision announced they had entered into an agreement for Activision to join the Microsoft Gaming family. This would bring big franchises like Warcraft, StarCraft, Diablo, Call of Duty, and Overwatch into the Microsoft collection of first-party titles. But, the announcement was just the first step of many before the actual transition can happen. Two important and fairly high hurdles still stood in the way: a shareholder vote and regulatory approval.
This week, Activision announced that its shareholders had overwhelmingly approved the transaction. In fact, over 98% of the shareholders voted in favor of selling the company to Microsoft. Activision CEO Bobby Kotick said,
Today's overwhelmingly supportive vote by our stockholders confirms our shared belief that, combined with Microsoft, we will be even better positioned to create great value for our players, even greater opportunities for our employees, and to continue our focus on becoming an inspiring example of a welcoming, respectful, and inclusive workplace.
For stockholders, this is not a major surprise. The value of the stock at the time of the announcement was around $76 per share, while the sale to Microsoft will bring $95 per share. This represents a large increase in value, especially as the stock price has been on a fairly steady decline since the surge following the announcement. At closing on January 14, the last day before the announcement, the stock was trading at $65.39. On January 18, the price surged to $82.31. The price has leveled out right in the middle of those two.
The next step for Microsoft and Activision is to get through the regulatory approval process. This could be a complicated process and is what is keeping the stock price low. The companies will face an environment in which the "consolidation of market power" is considered a problem as studios join publishers and console companies. However, if they can get past the issue, it will be smooth sailing for the companies.