The decision today by the UK"s Competition and Markets Authority to block the proposed purchase of Activision Blizzard by Microsoft has not hurt the stock price of Microsoft today. The same cannot be said of Activision Blizzard"s trading value.
Microsoft"s stock price (via CNBC) hit a 52-week high, trading 7.24 percent higher than on Tuesday. Investors have shrugged off today"s decision by the CMA, and seem to be concentrating more on Microsoft"s latest solid financial numbers for its Q3 2023 fiscal quarter. The company beat estimates for the quarter, as it recorded $52.9 billion in revenue.
By contrast, Activision Blizzard"s stock price is currently taking a hit. At the end of the trading day, the price was down 11.45 percent.
The UK"s CMA ruled that the proposed $69 billion purchase of Microsoft by Activision Blizzard would hamper competition in the small but growing cloud gaming market. Even though Microsoft made agreements with several cloud gaming companies to give them access to Microsoft and Activision Blizzard"s games, the CMA felt that Microsoft did "not sufficiently cover different cloud gaming service business models, including multigame subscription services."
Microsoft has already said it will appeal the CMA"s decision to block the purchase. That means it must make its case to the UK"s Competition Appeal Tribunal. Eurogamer reports that the appeal could take at least several months to be heard by the Tribunal. Even if Microsoft gets the CMA"s decision overturned, that means it will go back once again to the CMA for another review before it renders yet another decision.
Update, 12:05 pm ET: Activision Blizzard unexpectedly revealed its Q1 2023 fiscal year earnings in the middle of the trading day, and a day earlier than originally announced. Revenues came in at $2.38 billion for the quarter, up from $1.77 billion compared to the same period in 2022. The company also made another comment about the UK CMA decision to reject its planned purchase by Microsoft, calling it "disproportionate, irrational and inconsistent with the evidence."