Should Microsoft's acquisition of Activision Blizzard fail, the latter's stock could plummet

Microsoft may have confirmed its intention to acquire Activision Blizzard for $68.7 billion, but the deal still has to go through multiple processes. The deal, for now, is in the hands of the game developer and publisher’s shareholders. Should the deal fall through, the stocks of Activision Blizzard would spiral downwards with such intensity, they might never recover, hinted the SEC filing.

Attempting to stress the importance of the deal, Activision Blizzard cautioned that stock in the company would likely "decline significantly", and it may never return to the same price again:

If the merger is not consummated and depending on the circumstances that caused the merger not to be consummated, it is likely that the price of Activision Blizzard common stock will decline significantly. If that were to occur, it is uncertain when, if ever, the price of Activision Blizzard common stock would return to the price at which it trades as of the date of this proxy statement.

Accordingly, if the merger is not consummated, there can be no assurance as to the effect of these risks and opportunities on the future value of your shares of Activision Blizzard common stock."

The bid to acquire Activision Blizzard has already been termed “opportunistic”. This is because Microsoft moved ahead with the acquisition bid right after stocks of the game publisher had taken a serious downward turn. The precarious drop happened after news of the sexual harassment cover-up involving current Activision Blizzard chief Bobby Kotick broke out.

President and Vice-Chair of Microsoft, Brad Smith, has stressed that Microsoft is committed to removing offenders at Activision Blizzard once the deal goes through. However, even if the majority of shareholders give their consent, the deal could be finalized next year, probably before June 30, 2023. Meanwhile, both the companies have to wait for the FTC investigation to complete. At close to $70 billion, this is by far the biggest “all cash” acquisition in the tech and gaming space, but Microsoft doesn’t seem concerned.

Activision Blizzard shareholders will vote on whether to grant their approval or deny their consent to the acquisition by Microsoft on April 28, 2022. Several analysts are confident that the shareholder voting process is the least of the companies' worries.