Microsoft’s Activision Deal Could Set Off M & A Talk in These Stocks
Ian Cooper
Cooper was among the few analysts to spot the financial crisis of 2008, the top of subprime and Alt-A, the death of Lehman Brothers, Bear Stearns, and New Century Financial, and even the Dow’s collapse to 6,500, as well as its recovery. He even called for gold to rally well above $1.500 when it traded under $600.
Markets may be plunging.
But there’s still a good deal of opportunity to be found.
Look at video game stocks, for example.
Since Microsoft (MSFT) announced it wants to acquire Activision Blizzard (ATVI) in an all-cash $68.7 billion deal, gaming stocks have been on fire. All on speculation we could potentially see newer deals in the weeks to come.
In fact, as noted by Wedbush analyst Dan Ives, “It’s going to start a major ripple effect in terms of consolidation for other videogame publishers,” as quoted The Wall Street Journal.
Especially as video game popularity explodes, including those with a gateway to the metaverse.
“Microsoft’s purchase of Activision will accelerate more deals in the industry, analysts said, as big tech companies seek to broaden their consumer offerings by acquiring game publishers and developers that attracted players during the pandemic. Microsoft’s purchase of Activision, which owns the Call of Duty, World of Warcraft and Candy Crush franchises, would also help the company edge into the streaming and metaverse spaces,” added WSJ.
That news could create interest in stocks such as:
Roblox Corp. (RBLX)
Roblox is already viewed as a pioneer in the metaverse space, with its social interaction, gaming, and spending in virtual worlds.
While the stock slipped over the last few weeks, don’t count it out just yet. Analysts at Needham just initiated coverage of the stock with a buy rating and a price target of $136.
“We do not believe investors need to dream the dream of the long-term metaverse to be bullish on shares, rather there is a path for continued user and engagement growth globally and monetization should follow,” according to the firm, as quoted by Barron’s. “That said, we see an enormous potential opportunity for the platform provider(s) of the metaverse.”
Take Two Interactive (TTWO)
CEO Strauss Zelnick told CNBC, “We’re probably the biggest metaverse company on Earth.”Plus, analysts at Jefferies Group once noted, “Take Two’s IP Grand Theft Auto, Red Dead Redemption, and NBA2K are already on the road toward a “Metaverse”. They lack a true economy and many of the attributes needed today to be a Metaverse, but they have high social engagement, brand crossovers, and the start of an economy that makes sense,” as noted by Insider Monkey.
Electronic Arts (EA)
Electronic Arts could be set to jump into the metaverse, too.
According to MarketWatch, “Electronic Arts is looking to make a grand entrance in the metaverse and crypto space by bringing some of its top games to the Encrypted with cloud gaming service, starting with Battlefield, The Sims SimCity, Fifa: Inquisition and Apex Legends. In a related development, EA is launching the Metaverse MVEA1, designed to allow gamers even without a gaming PC to play in metaverse mode, including over 1 billion underpowered PCs and incompatible devices such as phones, tablets, and Chromebooks.”
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