Activision Stock BIG Profits- Sell? Buy?

TL;DR

Microsoft's acquisition of Activision stock presents a potential opportunity for investors due to the guaranteed cash payout of $95 per share.

Transcript

hi i'm jimmy in this video we're going to look at what happened with activision stock should we buy more stock today should we sell it activision stock is up really big over the past week so that's the basic question okay now let's jump right in so activision stock is a stock that i personally own in fact by coincidence one of my more recent videos... Read More

Key Insights

• 🍉 Activision stock experienced a significant increase in value following Microsoft's announcement, offering short-term gains for investors who bought prior to the acquisition.
• 🛟 Microsoft's substantial cash reserve and financial stability make it capable of acquiring Activision.
• 😘 The likelihood of the government intervening to stop the acquisition is low, given the nature of the deal.
• 🥹 The author recommends holding onto Activision stock or considering buying more shares at the current price, as the acquisition price of $95 per share is both the target and ceiling price.
• 🧑‍🤝‍🧑 The successful completion of the acquisition depends on the closing date, which will determine the return on investment.
• 🙂 Depending on the closing date, potential returns could range from above-average (15.6% in one year) to average (10.6% in 18 months) or below-average (slightly less than 8% per year in two years).

Questions & Answers

Q: What was the average cost per share when the author initially bought Activision stock?

The author purchased Activision stock at an average cost of $63.40 per share a few weeks before the acquisition announcement.

Q: What price per share will Microsoft pay for Activision stock?

Microsoft will pay $95 in all-cash for each share of Activision stock.

Q: What is the potential upside for investors in Activision stock after the acquisition?

With Microsoft's proposed price per share of $95, there is a potential upside of more than $12 per share, which represents a possible return of over 15%.

Q: Is there a possibility of the government intervening and stopping the acquisition?

The author believes it is unlikely for the government to intervene as Microsoft's acquisition of Activision would not create a monopoly but rather make Microsoft the world's third-largest video game producer.

Summary & Key Takeaways

• Activision stock experienced a significant increase in value after Microsoft announced its agreement to acquire the company in an all-cash deal.

• The price per share rose from $63.40 to around $82, resulting in a 30% profit for the author, who personally owns Activision stock.

• Microsoft's financial capability and the unlikelihood of the government intervening support the chances of the deal going through.