Microsoft acquires Activision Blizzard for US$69b

Hey Superheroes,

Global markets have been keeping us on our toes haven’t they? 

Starting this week off in the green, investors later turned pessimistic as geopolitical tensions continued and U.S. 10-year bond yields reached a 15-year high. 

Rising bond yields generally signal that investors believe there are more rate hikes to come.

Either way, this week has been all about the U.S. with Wall Street’s earnings season kicking off! 

Here are this week’s top stories. 

Microsoft acquires Activision Blizzard after almost two years

Microsoft has sealed the deal!

After 21 months, Microsoft cleared its final hurdle in fully acquiring Activision Blizzard for US$69 billion. It’s the biggest deal ever recorded in the gaming industry.

Activision Blizzard (ATVI) delisted from the NASDAQ exchange last Friday.

🎮 What took so long?

As a shock to no one, the record-making deal between Microsoft and Blizzard had many important eyes watching.

The U.S. Federal Trade Commission (FTC) was initially the first to speak out against the acquisition due to concerns that it may harm fair competition within the industry. Major competitor Sony also backed the FTC with a number of harsh words exchanged. 🫢

A judge later overruled the regulator, clearing Microsoft’s first hurdle – and Sony gave up soon after that.

Microsoft’s final blocker was the UK’s version of the FTC – the Competition and Markets Authority. That one took a while too, but well… all’s well that ends well!

💡 Fact of the week:

Microsoft CEO Satya Nadella is known to make some very savvy acquisitions, all of which have kept the company’s share price strong. 

Did you know that LinkedIn and GitHub are also owned by Microsoft?

Tesla lags behind while Netflix streams ahead

As you’ve probably already heard – Tesla and Netflix reported quarterly earnings earlier this week.

Here’s a short summary.

🚗 Tesla cuts prices

Tesla missed expectations for both earnings and revenue for the first time since 2019.

Revenue missed expectations by 3% while earnings took a bigger hit at 10% lower. Net income also tumbled by 26% compared to the previous quarter. 

The disappointing results come after Tesla issued several price cuts this year to grow sales volume at the cost of profit margins. 

Tesla shares have tumbled over 10% since the news.

📺 Netflix hikes prices

It looks like Netflix’s crackdown on password-sharing is working. 🥹

The streaming giant gained 8.8 million subscribers last quarter – an increase of 9% year-on-year. Spurred by this growth, Netflix has decided to hike prices for some streaming plans.

As a result, Netflix wholly beat analyst expectations. EPS was recorded at $3.73, beating estimates of $3.49 by 7%.

Shares soared by 16% as investors celebrated the win.  

🔦  Some other things we’re shining the Spotlight on:

THREE CHEERS FOR THE METAVERSE: Apple, Google and Meta yesterday cheered the FCC’s decision to finally allow the 6 GHz Wi-Fi band to be used for wearables after four years of discussions. 6GHz reduces lags and increases latency for tech like AR/VR headsets and opens the door to life in the Metaverse.

NETWEALTH LOSES WEALTH: Netwealth (ASX:NWL) dropped 8% this week after reporting fund outflows from high net worth investors. The wealth management company had total outflows of A$2.6b in the September quarter. This was however offset by deposits ending in a net inflow of A$2.1b for the period.

TEMPEST’S PRICE WHIRLWIND: Tempest Therapeutics (NASDAQ:TPST) is experiencing a whirlwind of share price movements, gaining over 1,100% in the last month alone. This bullishness follows news of positive results from its latest clinical trial for the treatment of liver cancer.

That’s all for this week’s Spotlight! 

American Express is scheduled to report later today. 

Next week will be busy with Google, Microsoft and Amazon amongst the big names releasing quarterly earnings. 

Australia’s quarterly inflation data is also due to be announced on Wednesday.

If you’d like to keep up to date with the reporting calendar and key company results, chuck us a follow on our Instagram page, @superheroau!

Thanks to all of you for being here and reading!