Hey, this is Tom and I think everybody feels that the stock market has not been kind to retail investors lately. Everybody is feeling the pain. But when I tell you that there's a legitimate opportunity to make 30 to 35 on your money right now in the stock market through a public company a blue chip, you probably want to listen. And while ago Microsoft made an offer to buy a gaming company called Activision Basically they said we'll buy the company at 95 per share. Now if you look at Activision right now, it's trading in the low 70s so there's a huge gap between the purchase price and the actual trading price right now. Reflecting anywhere for 30 35 depends on when you're going to look at the share price. Now look here's the problem here. The problem is that this is not without risk Now if everything just falls into place. and if Microsoft actually buys Activision for 95 dollars per share, anybody who buys now a share at 70 will get 95 dollars. Which means they'll make the 30 35 and everybody will be absolutely happy. Ecstatic. Great. In fact, Warren Buffett even took the gamble on this deal. It's called risk Arbitrage and he actually purchased nine and a half percent of Activision massive deal. basically betting on this deal to go through. He actually got in even lower than where we are right now I think in the low 60s so he stands to make about 40 45 from this deal. Now the fact is that Warren Buffett is playing this orisgar trash bit doesn't guarantee anything he can afford to lose. We probably can't. so our threshold for how careful we want to be is a little bit different than Warren Buffett. Now, the big problem with this deal is that everything between the two parties has been agreed upon. Everybody agreed on the prize Microsoft and Activision would really like to get this deal done Activision Faced some bad PR over some internal policies that happened in Activision. They want Microsoft to take the company away and basically pay everybody to leave and then have the library to themselves Microsoft Because they make the Xbox and they're pretty much in the midst of a console war with Sony's Playstation. They would love to add some more titles to their XBox catalog and basically get one over Sony and that creates a win-win So both companies are interested. So why in the hell there's a 30 35 gap between the purchase price and the current trading price? Well, that's because investors don't believe there's a high likelihood that this deal will go through. At least not high enough. The reason is because there's a major major issue here. the major elephant in the room called the FTC. Now, it's not only the FTC, it's also the CMA from the United Kingdom and also the EU. Those three major antitrust authorities have to approve the deal and there's certain others around the world, but basically the Uk, the EU and the US have to sign off on the deal. The Regulators have to confirm it because nobody wants Microsoft to become a monopoly to become over dominant in the gaming market. So The Regulators have to approve this deal without their approval. This deal is not going to happen now from this point on until the day the deal is supposed to go through, which is July 2023 in eight months or seven months. The only thing is going to impact the price of Activision stock on the free market is How Likely this deal will go through or will not go through the share price of Activision until July 2023 will move for no other reason. not macroeconomics, no interest rates, nothing. The only thing that would move the needle is the likelihood of a deal. The more likely the deal becomes, the needle moves up, the less likely the needle moves down. That's the only thing that happens while we're in this risk Arbitrage limbo. And that's important to explain because what happened is before we went to Thanksgiving the share dropped by four percent. Why did it up by four percent? Well, that's because Politico came out and said rumors are that the United States regulator the FTC will challenge this deal and will not just let it slide and that's a very, very important element. Why? Well, that's because the timeline does not add up if the FTC actually chooses to challenge this deal. That means that the deadline for the original purpose is not going to be met. This deal based on how it was signed by both parties is supposed to be finalized by July 2023. If there's a litigation, if they're actually going to take this to court, if the FTC, the U.S regulator is going to say no, no, no Microsoft this deal is going to make you way too dominant in the video game. Market we're taking you to court, We don't want you to buy Activision If that happens, they're not going to meet the deadline of July 2023 and the deal is going to most likely Fall Apart Of course, there's a chance that the companies will renegotiate a new deadline if they're so inclined, but who knows, it becomes a huge risk. So it's a very binary situation. If the U.S Regulators let it slide, then this is pretty much a GG game over. I Just use the terminology from the gaming. Well, GG means good. Game. It basically means that the deal will go through. if the FTC will push against it. We have a major problem. now. look: I Have to let you know that there have been more developments. To show a little bit more downside with this deal because in the latest 13f filings from Warren Buffett's Berkshire Hathaway we found out that in the previous quarter they actually reduced their holding by about 12. They went down from nine and a half percent of Activision to 7.7 percent. So Warren Buffett was actually in the previous quarter trimming his Activision position, basically making it less of an exposure for himself if the deal doesn't go through. If Warren Buffett was 100 confident or at least 95 or 90 confident that they will go through, you would not have trimmed his position. The fact is Warren Buffett by definition is now less confident that this gamble will pan out. He trimmed it from nine and a half percent to seven point seven percent. And obviously I'm not going to comment on How Likely the FTC is going to do it or not. I don't know. There's certain experts who say that the FTC will not have a case. Other experts are saying they might have a case. but the thing is, none of this match matters. Just the sheer fact that the FTC takes this to court pretty much puts this deal in Jeopardy most likely getting canceled. So the fact is, it doesn't matter if the FTC has an actual case or not. Which in fact is kind of alarming because if you think about it, the FTC is now headed by Lena Khan. She's kind of the new boss. She's young and she's very activist. There's a lot of virtual signaling going on there, so the FTC might do it, even knowing they're going to lose just to screw with the Microsoft dominance in the market. And even though right now it's kind of quiet because of the Thanksgiving weekend and all. I'm assuming that over the next few days you can hear a lot about this deal because there's a lot of money involved now. I Want you to not focus on the merits of the case. People will be arguing whether they should or should not get the deal done, Whether FTC will get involved in this, Whether Microsoft is too dominant, whether Sony is bigger or smaller, None of this matters. The one thing you need to think about if you're getting into this deal is what is the likelihood of the FTC to actually push on and actually take this to court? because that is a binary result. If that happens, this whole thing is in massive Jeopardy So that's the point you're looking at. Not the merits of the case, but the indicators from the FTC on How Likely they're going to take this to court now. as always, this is not Financial Advice: just my opinion might be it might be wrong as always. Don't click nothing. Don't smash nothing. Don't buy nothing except for one little Link In the description below, we have a special Black Friday sale for tip ranks. They're offering it at the lowest price they've ever offered it. I Believe the link is below. Go check it out. It's a great feature. I Use it every day. Definitely a value company to see what's going on. Check it out as always. Thank you so much! See the next video.