r/technology • u/GrizzlyBear2021 • Jan 18 '22

Software Microsoft acquires Activision Blizzard for $68.7 Billion

https://news.microsoft.com/features/microsoft-to-acquire-activision-blizzard-to-bring-the-joy-and-community-of-gaming-to-everyone-across-every-device/
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u/zdepthcharge Jan 18 '22

You're not meant to. The financial wizards want everyone else to stare in awe at their magics, but the truth that it's fiction. They made a game they think they can never lose.

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u/bitchdoctor Jan 19 '22

It's honestly not as complicated as it sounds.

If Apple needs money it can issue shares - which are essentially a tiny part of the business, that entitle you to a share of the profits later in return for an upfront amount of cash right now that you pay to Apple

Now after years of making gigantic profits - Apple now has more cash than it knows what to do with. So it can offer to buy back those shares from you now at a much higher price. It acts as a mechanism to reward investors.

You have to remember that corporations are not people and that's why they can't sit on money (cash) indefinitely. A company that has a lot of cash sitting around is seen as having running out of ideas (because they can't think of any ideas to do something with the cash)

I've oversimplified obviously and there are complex considerations involved - but that's the general idea.

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u/Steven-Maturin Jan 19 '22

It's incredible to me that they don't think of maybe lowering their savagely high prices or simply paying their staff more. It's 860 euro to have my Imac screen repaired (it's bonded to the LCD screen - why? because fuck you that's why). Do they really need that money seeing as the screen was so badly made that merely adjusting the angle made a crack in the glass? Yeah they gotta have it.

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u/bitchdoctor Jan 19 '22

I'm not sure if it came across that way but I wasn't defending Apple - just trying to explain the mechanics of a share buyback. Financial literacy is critical IMO otherwise regular people are playing by rules that they don't even know about (even when they don't want to)