Activision Blizzard Shares Slip On Potential Antitrust LawsuitActivision Blizzard Shares Slip On Pot

Activision Blizzard Inc. ATVI, -4.07% shares declined in after-hours trading Wednesday following a report that the Federal Trade Commission was likely to file an antitrust lawsuit to block the videogame publishers acquisition by Microsoft Corp. Blizzard slid 4.1% lower to land at the bottom of the S&P 500 index on Friday, following a report from Politico that indicated the Federal Trade Commission will file an anti-trust lawsuit that will block the takeover of Activision by Microsoft.

While the report did state that a lawsuit is not guaranteed, the FTC is looking over the deal and “are skeptical of the companies arguments.”

Microsoft responded to the Politico report, saying that they would still be third in the gaming market after the deal, trailing behind both Sony and Tencent. They went on to assert that the combination of Activision and Xbox would serve to make the gaming industry more competitive.

A spokesman for Activision also spoke to the increased competitiveness that would be fostered by the deal. He also shared that Activision is “committed to working with regulators” globally.

The deal to purchase Activision is valued at $69 billion, and if it goes through Activision would no longer be a publically traded company. Microsoft may understand the value of this deal, particularly after the most recent third quarter earnings report.

Activision reported net bookings of $1.83 billion and non-GAAP earnings per share of $0.68. Analysts were only expecting bookings of $1.7 billion and earnings of $0.50 per share.

Shares of Activision surged higher by roughly 30% back in January when the deal was announced, but have slipped slowly lower over the course of the year. After Friday's close at $73.47 shares are still up 10.4 for the year, handily outpacing the 15.5% drop in the benchmark S&P 500.