Microsoft isn’t spending all of their cash on hand. That’s what people are suggesting when they say they have 70 billion more to spend. Yeah they make money quickly but they also like to have a cushion and safety net just like people do. You never know what could happen.
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You can’t just look at cash in a a bank when it comes to a company like Microsoft, as they are not highly leveraged and it has a history of being a revenue generating machine. These are big thumbs up for any financial institution and Microsoft will be able to easily access credit without much hassle if needed.
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Oh I agree on that but people are just looking at cash on hand and saying they need to spend it. And that’s just not how they think at all. Could they spend 70 billion, most definitely. Is that actively something they want to or need to do? Absolutely not.
I wouldn’t be surprised if next acquisition of PS will be a studio that is close with Xbox.
But you also can not reasonably expect that Microsoft is spending another $20 billion for gaming, in the year they already spend $70 billion.
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Meaning? Related to gaming obviously, because I don’t get the connection.
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This transaction will effectively sever any connection between AT&T and WBD once it is completed. AT&T will not own any shares of the newly formed WBD, as those shares are being distributed directly to existing AT&T shareholders.
This removes all the risk of being in the movie/tv/game business from AT&T and removes all the debt of the new WBD from AT&T’s balance sheet. I had long thought this was the only way the deal made any sense for AT&T since the other proposed deal structure would have left a portion of WBD’s debt on AT&T’s balance sheet.
As far as the gaming implications, who knows? I suspect this may make WBD more eager to sell some of its gaming assets so it has cash to pay down debt or to spend more on tv/movie content - but obviously that is just speculation on my part.
Edit: I was lazy above in reference to the split-off leaving some debt on AT&T’s books. Once the split-off is complete all that debt would be gone from AT&T. However, the spinoff is quicker to execute and there is no guarantee that a split-off will actually remove all the WBD shares from AT&T. If AT&T still ends up with some WBD shares after the split-off then under U.S. consolidation rules it would still have some of the debt on its consolidated balance sheet. The spin-off is just a quicker and cleaner transaction.
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I was reading it twice, but I’m not 100% sure.
I think it’s just about the way how they plan to distribute the shares in the deal.
The options have been spin-off and splitt-off.
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I think we also forget that the ABK deal was very much opportunistic due to the price they were going at. Microsoft wasn’t looking to spend 70 billion but they were ready to do so when the opportunity arouse and I think this will continue to be the case going forward.
Imagine cheering for a group that is often portrayed as evil in media or hell, in real life. That is desperate in hoping Xbox fails to acquire.
Angry humming noises
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The choice of spin-off vs split-off may also indicate that AT&T knows few of its shareholders were interested in choosing to own WBD instead of AT&T. A split-off requires an either-or choice from existing AT&T shareholders, while in the spin-off, all AT&T shareholders will receive some WBD shares whether they want them or not. The spin-off is an easier transaction for AT&T to execute and allows it to get rid of its stake in WBD immediately.
Many of the AT&T shareholders will probably immediately sell their WBD shares, which could cause short-term market turbulence in AT&T stock and drive the price down a bit.
One interpretation of this decision is that AT&T is not very optimistic about the short-term future of WBD.
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So WBG Back on the table ?
Tried it and zzzzzzzzzz
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Meh.
I don’t think so, WB is in the middle of another highly advertized merger, I think the ship sailed in 2020. Maybe WBD will decide, like Disney, to not make games directly anymore and they will sell the studios, but it’s all speculation.
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MS should at least get NR with MK IP.
Jimbo saying to expect more acquisitions is great
let the ground quake
BTW Studio Wildcard still on the table, perfect studio for GP
