Microsoft makes a big splash with Bethesda acquisition! Is there a shakeup in Comcast’s future?

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The Top MarketBites Investment Stories for September 22nd, 2020
TOP STORY 1: Xbox exclusives? Microsoft buys Bethesda parent company in $7.5B deal

What is happening?
Microsoft buys ZeniMax Media for $7.5B, the largest acquisition Microsoft has made towards its gaming unit to date.

Why does this matter?
The move comes at a pivotal time as Microsoft prepares to compete with Sony for market share over the release of each firm’s respective new generation consoles. Sony is well known for having platform-exclusive titles, which many believed to be the driver of Sony’s market share growth between the PS3 and PS4 against the XBOX360 and the XboxOne. With popular titles such as Elder Scrolls, Doom, and Fallout as a part of this acquisition, Microsoft can level the playing field against Sony.

The Takeaway:
Microsoft will not be backing down in their fight against Sony, and despite not winning the recent TikTok bid, they are looking to catalyze growth through acquisition in other avenues.


TOP STORY 2: Undervalued or looking for change?
What is happening?
Activist fund Trian Fund Management LP has taken a 0.4% stake in Comcast. Comcast is currently valued at approximately $200B.

Why does this matter?
Comcast is one of the largest companies ever targeted by an activist or activist group. With that being said Trian has targeted household names such as Proctor & Gamble, General Electric, and Dupont De Nemours in the past. Comcast’s leadership has been in power for quite some time, and actively shaking up the firm could be quite the undertaking. In particular, the Roberts family, including Chief Executive Brian Roberts, have significant voting power over the firm. 

The Takeaway:
Trian Fund’s intentions are unclear at this time. Comcast had performed well prior to the COVID outbreak, and some reports suggest that Trian simply sees Comcast as a value play moving forward. This activity is worth keeping an eye on though. Should Trian become active within Comcast, we could see sales or spinoffs of various operating units within Comcast.


DEAL CORNER:

– Microsoft buys Bethesda for $7.5 billion to boost Xbox game lineup

– Illumina buys Gates, Bezos-backed cancer-detection startup Grail for $8 billion

– President Trump says ByteDance can’t keep control of TikTok in Oracle deal, China most likely to reject the deal.


WHAT ELSE IS HAPPENING:
– Volkswagen considers selling Bugatti – (read here)
– Sellers Market: Housing prices are skyrocketing in the suburbs – (read here)
– The Fed moves to restructure the Community Reinvestment Act – (read here)
– Discussing Netflix’s “The Social Dilemma” – (read here)

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