Microsoft Corp
Microsoft’s Activision Acquisition Is a Stupendous Deal
Equity Bottom-Up
216 Views, 20 Jan 2022 01:36
EXECUTIVE SUMMARY
- A blizzard of cost synergies we conservatively estimate at $500MM from lower distribution commissions, hosting costs, and cutting ATVI's highly paid C-Suite.
- Multiple strategic benefits: Catalyzes Microsoft's XCloud streaming game service and Game Pass subscription offering....potentially offers greater leverage for app store negotiations with Apple and Google.
- Accretive on valuation alone...MSFT is paying a 10% discount to ATVI's 23x average forward PE from last few years. MSFT's 11x forward P/S vs. ATVI's 5.5x revalues ATVI's revenues 2x.
detail (5-minute read)
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Aaron Gabin
TMT & Consumer Independent Equity Research Analyst
Obex Capital Research
I have over 18 years’ experience in investing in the TMT and Consumer sectors, almost entirely on the buyside. Started a...
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