Market Commentary

MSFT Wins EU Antitrust Case Amid Heavy Selling by Politicians

Jabran Kundi
6 Feb 2024 · 2 minutes read

The start of the week brought some good news for Microsoft (MSFT:US) when EU regulators gave the green signal for its acquisition of the gaming company Activision Blizzard Inc (ATVI:US)

Since the announcement of the $69 billion acquisition, which is the largest in the company’s history, Microsoft has faced resistance on the regulation front. Two weeks ago, the deal was blocked by UK regulators who cited reduced innovation and less choice for gamers as the reasons for blocking the deal.

As things stand, Microsoft has already won the approval of regulators in Japan, South Africa, Brazil, Chile and Serbia. The countries still reviewing the deal include Australia, New Zealand, South Korea and China.

The approval by EU regulators is likely going to help Microsoft win approval in the remaining countries, especially China and South Korea. Australia and New Zealand may share the same opinion as the UK, but Microsoft is hopeful it can convince the UK to reverse its decision. They have until May 24 to appeal against the UK's ruling.

UK regulators, who have already received a lot of criticism for their decision, will have their work cut out for them when Microsoft lawyers appeal against their decision on the back of the EU approval.

Politicians in the US have made a number of trades on the sidelines while the acquisition saga continues. Tommy Tuberville bought $15,000 to $50,000 worth of puts on Microsoft in early April, followed by a huge $100,000 to $250,000 sale of ATVI on 26th April, the same day the UK blocked the acquisition. 

Michael McCaul sold $50,000 - $250,000 worth of Microsoft shares in April as well. Other recent sellers in the last month include Seth Moulton’s sale of ATVI worth $50,000 - $100,000, Michael Burgess sale of $15,000 - $50,000 worth of Microsoft shares and Ro Khanna’s sale of $15,000 to $50,000 worth of MSFT.

These are by no means small figures. If the selling spree from these politicians is anything to go by, Microsoft might be in for tough negotiations in getting its ATVI acquisition deal approved by global regulators.