I’ve been sitting on this writing my thoughts, and constantly just deleting it. Why? For one, the acquisition will be in all cash with Microsoft acquiring Activision Blizzard (ATVI) for $95/share ($687 billion deal). ATVI’s share price has been depressed over the past few months due to all the bad news surrounding the company. It naturally jumped on the news, and so I wanted to watch it (it closed at $82.15 today so it is still at a discount to the proposed acquisition price). The deal itself is expected to close sometime in 2023.
The other major issue is Kotick remaining CEO. And it has everything to do with the following:
Kotick is sticking around for the payday and will be trying to avoid the termination for cause column (where he gets “only” $264K), and shooting for the last column where he’ll collect a cool $293 million. Note that this does not include whatever shares of ATVI he owns (4.2 million shares which would equate to $350 million). Beyond this, there really isn’t any additional details (like what his compensation will be after the deal closes).
As a shareholder of Microsoft (I’ve owned MSFT far longer than the time I owned ATVI which I exited back in July), it’s offensive that Kotick comes along for the ride when he is the main problem afflicting Activision Blizzard. People forget that Blizzard acquired Activision, no one from Blizzard wanted to run the combined company (so Kotick remained as CEO; look at how bad things got for both halves). Microsoft Gaming needs to be wary of the same thing happening to it.
The fact that he will remain as CEO, also does nothing to make me want to re-patronize some of the Blizzard Entertainment games. This only cements my desire to continue staying away from them.
Basically, I thought I had distanced myself from this, but it is now only but a formality that I’ll have a financial interest again with this deal. This seriously infuriates me because Kotick doesn’t deserve anything period. Yet he is more than likely going to make out like a bandit whether he stays or not (and I know he is going to be doing his best to avoid being held accountable for a lot of the unearthed news about his conduct while CEO at Activision Blizzard).
