A financial expert has claimed that Microsoft's $69 billion purchase of Activision Blizzard could be on a "collision course" with antitrust regulators in DC.
As spotted by VGC, Gene Munster, co-founder of tech-focused venture capitalist firm Loup Ventures, appeared on CNBC's Squawk Box to analyze the deal everyone's talking about today. At one point, host Joe Kernen wondered aloud why Activision's share prices are hovering around $89 despite Microsoft's purchase at $95 a share. According to Munster, investors could be hesitant to buy in due to a potential conflict between Microsoft and federal lawmakers.
"The simple answer, Joe, is that this is gonna be some good drama that's setting up, and the market already sees it coming down around the corner," Munster said. "And probably the title of this episode [should be] Silicon Valley / DC collision course, because effectively what Microsoft and Activision are doing is saying 'we don't buy it DC, we don't buy that you want to create greater control around these companies, we don't believe that you ultimately want to break up these companies.'"
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The conflict Munster referred to relates to federal antitrust laws as well as the Biden administration's generally unfavorable view of consolidation at the scale of Microsoft's Activision deal. Munster suspects that if lawmakers don't challenge the acquisition, it'll devalue the administration's talk on regulating big tech.
Ultimately though, Kernen doesn't see a legal foundation for DC to stop Microsoft's deal with Activision, which is expected to close in 2023, from going through. "In the end I think the deal gets done," he predicted.
"In the end, these big tech companies - despite, I think, frustration from many about the kind of wealth that they've created for themselves - I think that they are ultimately making consumers' lives better. And I think that you can debate the profitability side of all this, but I think [it'll actually happen] because I think in the end DC doesn't have the ground to stand on to ultimately block this."
In the wake of the takeover, Xbox boss Phil Spencer says Activision games will still be "enjoyed on a variety of platforms."
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