Microsoft Stock Fell Marginally as It Prepared To Defend Activision Transaction in Us Court

Microsoft Stock

Microsoft Stock (NASDAQ:MSFT)

In light of global and domestic competition concerns, Microsoft (NASDAQ:MSFT) will appear in federal court in San Francisco on Friday to argue for its acquisition of Activision Blizzard (NASDAQ:ATVI). As a result, Microsoft stock declined today.

According to Reuters, U.S. District Judge Jacqueline Corley will decide during the hearing whether or not to impose a preliminary injunction to block the proposed $69 billion takeover.

While Activision was up roughly 0.5% in early trade on Friday, Microsoft stock was down 0.7%.

Microsoft attorneys said in a court filing on May 5 that the plaintiffs, in this instance gamers, are asking the court to make an “unprecedented” judgment without providing proof of the injuries they claim to have suffered.

A prior version of the case was dismissed by Judge Corley as “insufficient.” Still, she permitted the plaintiffs to refile, the news site said.

Microsoft, headquartered in Redmond, Washington, is also grappling with the Federal Trade Commission’s (FTC) possible domestic rejection of the purchase while it continues its investigation.

The transaction has been criticized in certain foreign countries, particularly the United Kingdom.

Britain’s antitrust regulator, the Competition and Markets Authority, halted the acquisition last month over cloud gaming competition concerns.

According to a statement released by the CMA, Microsoft (MSFT) already has “strong advantages” in the cloud gaming industry due to the company’s ownership of Windows, the Azure cloud platform, and Xcloud, and the size of its Xbox gaming base.

Analysts on Wall Street were taken aback by the ban since the CMA had previously said that cloud gaming, not console gaming, was their primary issue over purchasing the Call of Duty producer.

Activision and Microsoft have both said that they plan to challenge the decision made by the U.K. regulator, stating that the decision is incorrect.

This week, the CMA forbade Activision and Microsoft from acquiring any share in each other without first gaining its approval.

Sony (NYSE:SONY), a Japanese entertainment behemoth that competes with Microsoft in the gaming industry, has spoken out frequently against the transaction. Microsoft’s cloud gaming partners include Nintendo (OTCPK:NTDOY), Nvidia, and others, but not Sony.

The European Commission has yet to officially make a ruling on the merger. Still, it is widely expected to greenlight the $69 billion gaming transaction next week, maybe as early as Monday.

Featured Image: Unsplash @ Matthew Manuel

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