5 ms·

This is a strawman argument that falls apart when you start looking at it even a little bit closer. If MS doesn't buy Activision, that continue can move along

• WorldMaker 4y ago
  > If MS doesn't buy Activision, that continue can move along perfectly fine and be an extremely profitable company serving two platforms. We actually don't know this. It's not a guarantee that an extremely profitable company doesn't want to exit the market and will exist "as is" in perpetuity. The fact that they've put themselves into a position to be bought out is its own strong signal they are considering exit strategies. Activision's own history is full of being the bucket other huge publishers (messily) exited into. (Vivendi, being a huge example, and itself carrying the combined exited weight of Sierra, Davidson, and Knowledge Associates. Blizzard being another strange example.) Companies generally have very strong "will to live" certainly, but boards get tired and investors get cranky, and sometimes companies "need" to make an exit. It's possible Activision remains a large publisher if the Microsoft buy out fails. It is also just as possible that vultures see what is left of Activision as a dead man walking and start to pick at it immediately and strip mine it for parts. (Atari, Infogrames, THQ, …) It is also just as possible that Activision will be between a rock and a hard place and forced to take the next best offered deal. (Would you be just as upset if Activision became Sony exclusive? Or if Activision became just another branch of EA?) The alternatives right now include a lot more than just the binary of "Microsoft buys Activision" and "Activision remains in its current state", especially because "Activision tries to sell to Microsoft" is a strong signal that the current state either isn't sustainable or isn't as strongly as interest to the board/investors as people might think. "Activision continues to exist as-is" is a bad reason to block the purchase. Activision may not survive either way. ("Activision may not survive either way" of course isn't a good reason to be pro-buyout, of course, either. I'd think that goes without saying, but sometimes here on HN the obvious needs to also be reminded in conversations full of polarized opinions. I'm not explicitly pro- or anti-buyout here, I'm just reminding everyone that companies sometimes die and there's no "natural state" here to argue about.) (I don't have much to add to the speculation about exclusives and will they/won't they Microsoft keeping their bargain on cross-platform initiatives. I think that debate is going to keep going in circles.)
  • intev 4y ago
    > The fact that they've put themselves into a position to be bought out is its own strong signal they are considering exit strategies. This is 100% not true. Companies don't have to put themselves in a position to be bought to have offers thrown at them. There are literally 100s of examples of this. Every company can be bought for a price. That's primarily the mismatch. This is the reason Instagram and Whatsapp sold for the prices they did at the time they did. When they were bought, everyone was shocked at the obscene sum of money for such a small team. In hindsight amazing purchase, but at that time Zuck had to throw an obscene sum at them to get them to say yes. Also public companies have a fiduciary duty consider *all* offers and see if its valuable for shareholders. At a certain price, it will become a, no brainer, extremely valuable offer. The only other hurdle is getting the ok from regulators which is where they are stuck now. The rest of your response hinges of the fact that we don't know the unknown variables and therefore the decision is not simple. But this argument could be made for literally every decision in life and we would all be stuck doing nothing. We have to make decisions based on what we know and accept that there will be a margin of error. Ideally we also know all the risk factors but that's literally impossible.
    • WorldMaker 4y ago
      > Companies don't have to put themselves in a position to be bought to have offers thrown at them. We're past the stage where offers have been thrown at them. We're at the stage where wedding vows have started to be exchanged "pending regulatory approval". Companies do have to put a lot of work into those parts of the M&A stages (they've done multiple rounds of fit vetting and offer/contract approvals and investor handshakes, etc). At the waiting for regulatory approval stage they've already gone above and beyond any "fiduciary duty" they are expected to perform to already seeing the M&A as the "foregone conclusion". They've agreed to be bought and have put tons of work into being bought. A lot of companies don't come back from that when the regulatory agencies disapprove and shut the whole thing down. At the very least it is a morale blow for all the of the hard work of the M&A process up to that point and boards/investors often seem to become more certain that the next step is an exit, especially after the pain of a failed exit. > The rest of your response hinges of the fact that we don't know the unknown variables and therefore the decision is not simple. But this argument could be made for literally every decision in life and we would all be stuck doing nothing. We have to make decisions based on what we know and accept that there will be a margin of error. Ideally we also know all the risk factors but that's literally impossible. We aren't making any decisions here. Other than I guess picking sides in "anti-buyout" and "pro-buyout". I admitted I'm not feeling like my opinions weight to either side, I'm just pointing out the possible real world fallout of "anti-buyout". That's nothing to do with decisions at all. I am just pointing out all the unknowns because people are assuming that supporting "anti-buyout" means supporting the status quo and that's absolutely not the same thing.