Microsoft’s Activision Buy ‘Significant Negative’ for Sony: Cowen

Judging from Tuesday’s nearly 13% decline in Sony’s stock price after Microsoft announced its $68.7 billion Activision Blizzard buy, “the market appears to have come to the conclusion that the deal announcement destroyed roughly as much value at Sony as it created at Microsoft-Activision,” said a Cowen investor note Wednesday. “The market is saying that Microsoft buying Activision Blizzard would reduce the value of Sony's PlayStation business by about 60%,” it said. “We think that Microsoft buying Activision Blizzard would be a significant negative for Sony, given the likely eventual loss of access to new releases in the Call of Duty, Overwatch, and Diablo franchises. On the other hand, we really don't think it would be negative to the tune of cutting the value of their PlayStation business by more than half.” The preliminary signals Microsoft put out for public consumption Tuesday suggested Sony would experience no disruption in its access to Activision content support for the PS5 (see 2201180009). Sony shares fell another 5% Wednesday, closing at $110.04.