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Activision Stock Falls on Report FTC Might Block Microsoft Deal

Activision is best known for games including Call of Duty and Candy Crush.

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Dreamstime

Activision Blizzard
stock dropped Friday after a Politico report suggested that the Federal Trade Commission will file an antitrust lawsuit to prevent
Microsoft
‘s takeover of the videogame maker.

An article by Politico, citing three unnamed sources, said the lawsuit isn’t a certainty, but that members of the FTC staff are looking over the deal and “are skeptical of the companies’ arguments.”

Barron’s has not been able to confirm Politico’s article.
Microsoft
(ticker: MSFT) did not return our request for comment, while the FTC declined to comment.

A spokesman for
Activision
(ATVI) called anticompetitive effects of the deal “absurd,” noting increasing competition. He said the deal would benefit the gaming industry, and shared that the company is “committed to working with regulators” all over the world.

Activision
stock is down 4.1% to $73.47 in Friday, and has risen about 10% year to date. 

The deal, valued at $69 billion and announced in January, has been top of mind for investors, drawing more attention than a recent third-quarter earnings beat. Activision reported net bookings of $1.83 billion and non-GAAP earnings per share of 68 cents. Analysts had penciled in $1.7 billion and 50 cents per share. 

If the deal with Microsoft goes through, Activision will no longer be a publicly traded company. Activision’s board of directors was bullish about the decision in its 2022 proxy statement, calling it “the right transaction with the right partner at the right time.”

Activision is best known for games including Call of Duty and Candy Crush. Candy Crush was developed by King, who recently passed $1 billion in annual operating income for the first time, according to the 2022 proxy statement.

Candy Crush celebrated its 10th anniversary on Nov. 14. The game has over three billion downloads, earning the title of “most downloaded casual match game of all time,” according to King.

Write to Emily Dattilo at emily.dattilo@dowjones.com

Credit: marketwatch.com

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