I need some explanation, Schrier article said Wall Street expected the deal was going to fail, while the extract posted here says Buffet expects the deal to go through, so how does this validates the idea that the deal is going to fail?
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Buffet is essentially making a wager that exists because of the conditions outlined in the Bloomberg article's premise. The issues that so many people here lack basic reading comprehension/critical thinking skills, can't be bothered to read past headlines, and can seemingly only think in console warrior driven absolutes, so that Jason/Bloomberg article suddenly became them making some sort of declaration that the deal is going to fail, which was, like, not at all the premise, only a vast majority of this community either lacks the ability or the want to have any sort of meaningful discussion on that end. Like someone else mentioned, people took that initial thread/article as some personal affront to Microsoft/Xbox, because thats the only lens through which they view the gaming industry, and from that point on it became pretty impossible for the discourse around this to be anything but shit.
No. The article was about the stock price being below what it should because the market has some doubt about the deal going through.
The fact the Buffett bought these shares shows that he agrees with the article's argument: "yes, the share price is lower than it should be, so I can make some money here because I think the deal will go through."
At no point was the Bloomberg article arguing that the deal will fail.
See above.
Matt are you looking forward to another thread of having to repeat yourself in circles to explain basic market mechanics? :p
So basically, bloomberg indicated that wall street investors were going to bet on whatever the deal was going to fail or not, and people took it as "Everybody expects the deal is going to fail?"
This issue I have with Jason's article is it presented a presupposition that "the market believes the deal will fail," which is an extremely reductive, arguably dishonest, framing. The "market" may very likely believe the deal has a greater chance of going through than not, but it may not view the return being worth the current risk + estimated time horizon of the return + opportunity cost.
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User banned (1 month): Platform warring, long history of similar behavior
Shhh the prophets of truth know better.
The article was literally titled that Wall Street is betting the deal still fail. Meanwhile wall Street was planning on increasing their interest. Are your saying Buffet decided to do this afterwards? After the article?
Its like if Las Vegas bookies thought the Rams were going to win the Super Bowl, and made the Bengals the underdog, and Warren Buffet, who thought that the Bengals had a chance to win, saw that as an opportunity to make some money, one that wouldn't exist if the Bengals were the favorite, and put a big wager on them to win.
As is the case with insiders/industry folk though, people take everything they say as some sort of declaration of fact even when its never intended to be that because they can't put their Console Warrior capes down for 2 seconds to look at things from a reasonable viewpoint.
But how can you be sure when more people selling than buying means that the price will go up and isn't the liquidity for ATVI all over the map anyway..!?
Dudes old and is giving his money away when he dies, do we really care what he's doing? He could revive MySpace if he felt like it.
Well Activision is almost guaranteed to go up now, Buffet makes his own momentum in the stock market, people will see that Buffet bought a large share and jump on the bandwagon.
When it comes to billions in investing, yes you should care what he does/thinks
It was definitely a bad headline. Betting against a stock would shorting it and I honestly don't know who on their right mind would short ATVI with the acquisition incoming, unless they're absolutely positive that the DOJ will block it. The whole market is just down cause of bearish economic fears, inflation, war, etc. Growth expectations every quarter for all these companies are basically unsustainable, a lot of them are just offering lame ass buybacks.
User warned: trolling
Again, how coherent and trustful is he at 91? He can literally do whatever and it doesn't matter. It won't affect his quality of life.
Why are you only referring to the headline in your posts and not the article's contents
Incredible and disheartening movie lol.Who's Warren Buffett ?
No, Buffett decided to do this after he saw the market reaction, which gave him an opportunity. The market is not a monolith, he's betting the overall market hedging is wrong, and I have done the same.
If someone thinks this buyout will go through, what's stopping them from buying out options on this with a strike price lower than the $95?
The options would be valued for a cash settlement because this is an all-cash buyout. Especially if the strike price is lower than the buyout offer.
I'm having a hard time finding information this (like do you lose the premium as well and just get the difference between strike and offer price?)
The options would be valued for a cash settlement because this is an all-cash buyout. Especially if the strike price is lower than the buyout offer.
I'm having a hard time finding information this (like do you lose the premium as well and just get the difference between strike and offer price?)
You'll get about a 25% return on AB.
Just 10%ish on Twitter.
Absolutely nothing.
User warned: mod whining
Lol bizarre warning for that post when some many posts on this forum are overt trolling and concern trolling and nobody is warned in those cases.
From what I can tell, the article never presented this argument. The only substance it states with regard to the share price is that spread between the current price and offer price represents a greater premium than "most of the announced -- but still pending -- deals tracked by Bloomberg."
It actually seems to be a rather neutral article with the exception of the language used in the headline, which doesn't appear to be supported by the text in the article. Even the presentation of the article's premise as stated in its first paragraph has a real and distinct difference to how it is presented in the headline.
Hmm, I wonder what will happen on Monday with Activision Blizzard. I guess I should really consider it.
It's a bad article (bad arguments and a bad conclusion), every single analyst recommendation is to either hold or buy ATVI stock https://www.msn.com/fr-fr/finance/d...Money11&cvid=11227b0ed0a14d9eaa6df5b203083f24
ERA has a really weird reaction to Schrier articles, arguments both for (appeal to authority much?) and against that I'm seeing are just something else... but like exactly what you said, if WallStreet ever thought the deal won't get through they'd be shorting the stock like crazy (because ATVI stock would lose lots of value if deal falls through).
Wait, so if I buy a call at, say, $80, and the deal goes through, I can still exercise the call at that point and receive the $15 per share? That seems too good to be true
Honestly I agree that it was pretty much the perfect post. It was simply funny and perhaps had a bit too much truth to it.
People vastly overestimate the group-think all over the internet.
No, "wall Street" wasn't "planning on increasing their interest." Warren Buffet was, precisely because he thought the market at large was undervaluing the stock, which was the phenomenon Shreier was describing. He's making a bet that the rest of the market is wrong in their apparent caution regarding the Microsoft transaction. If the market at large was increasing their interest, the arbitrage opportunity Buffet is trying to take advantage of wouldn't exist, because the price for Activision stock would be much closer to Microsoft's purchase price for it.
You're fundamentally misunderstanding both what Shreier was claiming and what Buffet is doing.
He's still wrong though... and digging himself deeper trying to defend a bad piece.
Short interest is sitting at 18.11 million shares, that's only 2.48% of Float, that's the number of shares that have been sold short and not yet closed out... no one is betting against the deal falling through except whomever is shorting those 18 million shares, out of ~800 million.
Yeah for mine the headline "Wall Street bets deal will fail" is click bait if the premise of the article was "stock is undervalued but deal likely to go through"
if the layman keeps misunderstanding the articles intent based on the headline maybe it's a misleading headline? 🤷♂️
Not really? It's more that it's an article describing market behavior, with a headline about market behavior, and then it gets posted here, at a video game enthusiast site, where a lot of people who are not used to reading articles about market behavior (and are maybe a little sensitive to the idea that the merger isn't a sure thing) apparently took the headline to mean "Jason Schreier Says: The Merger Won't Happen." And, like, that's on us, not Bloomberg.
The headline was fine. It was a businessy headline in a businessy publication. A lot of people here just…don't seem to understand the world of business very much, as some of the cringier posts in this thread prove.
I won't lie, bought some shares after Bloomberg article since it kind of seemed free 25% profit. Better short term profit vs holding money in either stocks that may tank or cash with inflation or even treasuries giving out a few percentage points.
Yup, agreed. Can't help but feel someone took that post a little too personal.
I'm guessing at least part of it is because Jason still regularly posts here. Wouldn't want to alienate him.
I would argue that not only is the headline not "fine," it doesn't even align with the text of the article or what I can perceive as the general market / wall street sentiment.