Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<ul>
<li>Sony has not taken long to respond to Microsoft’s purchase of Activision Blizzard. </li>
<li>It is being reported that Sony will acquire Bungie, original developer of the Halo franchise as well as Destiny for $3.6bn.</li>
<li>The cost effectiveness of this move stands in stark contrast to Microsoft’s acquisition and is significantly more targeted in its apparent goals, as usual.</li>
</ul>


Sony has not taken long to respond to Microsoft’s purchase of Activision Blizzard. 
It is being reported that Sony will acquire Bungie, original developer of the Halo franchise as well as Destiny for $3.6bn.
The cost effectiveness of this move stands in stark contrast to Microsoft’s acquisition and is significantly more targeted in its apparent goals, as usual.


<ul>
<li>Following its 12.8% fall last Wednesday Sony is now getting hit for 7.7% today thanks to Jay Powell. </li>
<li>This is an excellent opportunity to resize positions in our view as the long-term outlook remains excellent. </li>
<li>We had been worried about potential volatility due to the name becoming consensus but since that has been realised we are back to being uber bulls here.</li>
</ul>


Following its 12.8% fall last Wednesday Sony is now getting hit for 7.7% today thanks to Jay Powell. 
This is an excellent opportunity to resize positions in our view as the long-term outlook remains excellent. 
We had been worried about potential volatility due to the name becoming consensus but since that has been realised we are back to being uber bulls here.


Event-Driven

<ul>
<li>A positive earnings surprise for Fast Retailing and Microsoft’s acquisition of Activision Blizzard hitting Sony have hurt the performance of our skew trade. </li>
<li>Despite this, the dramatic fall in the Nikkei means it is now outperforming the Nikkei since we first suggested the trade. </li>
<li>Looking forward we expect recent volatility to be absorbed over time and we retain conviction on our picks.</li>
</ul>


A positive earnings surprise for Fast Retailing and Microsoft’s acquisition of Activision Blizzard hitting Sony have hurt the performance of our skew trade. 
Despite this, the dramatic fall in the Nikkei means it is now outperforming the Nikkei since we first suggested the trade. 
Looking forward we expect recent volatility to be absorbed over time and we retain conviction on our picks.


TOPIX-Nikkei Skew Trade Hit by Sony and Fast Retailing but Outperforming Nikkei

<ul>
<li>Our initial thoughts on Microsoft’s bid for Activision Blizzard were on the sceptical side given various signs of trouble at the company. </li>
<li>In contrast the majority of commentary on the deal has been somewhere between positive and euphoric though there are monopoly concerns from customers. </li>
<li>Yet the more we examine the implications the less we like this deal for Microsoft.</li>
</ul>


Our initial thoughts on Microsoft’s bid for Activision Blizzard were on the sceptical side given various signs of trouble at the company. 
In contrast the majority of commentary on the deal has been somewhere between positive and euphoric though there are monopoly concerns from customers. 
Yet the more we examine the implications the less we like this deal for Microsoft.


Microsoft – Thinking Through the ATVI Acquisition Further

<ul>
<li>Microsoft has agreed to acquire Activision Blizzard for $95 per share (+45.3% vs. undisturbed) which values the company at $68.7bn in EV. </li>
<li>ATVI had been under pressure since the middle of last year facing various sexual harassment allegations, but CEO Bobby Kotick will not be replaced. </li>
<li>Like with ZeniMax this deal features a demanding valuation for a number of IPs which have seen better days… but there is Call of Duty…</li>
</ul>


Microsoft has agreed to acquire Activision Blizzard for $95 per share (+45.3% vs. undisturbed) which values the company at $68.7bn in EV. 
ATVI had been under pressure since the middle of last year facing various sexual harassment allegations, but CEO Bobby Kotick will not be replaced. 
Like with ZeniMax this deal features a demanding valuation for a number of IPs which have seen better days… but there is Call of Duty…


Sony - Microsoft's Activision Blizzard Acquisition Shakes Things Up

Japan

Sony Group Corporation manufactures and distributes electronics products and provides related solutions. The Company produces televisions, cameras, mobiles, audio and video products. game equipment, and more. Sony Group also engages in game production,  movie production, music production, and other businesses.

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Sony Corp (SONY US)

Sony – The Bungie Counterpunch

It is being reported that Sony will acquire Bungie for $3.6bn. The cost effectiveness of this move stands in stark contrast to Microsoft’s...

Mio Kato

Sony – Great Opportunity

We had been worried about potential volatility for Sony due to the name becoming consensus but since that has been realised we are back to being...

Mio Kato

TOPIX-Nikkei Skew Trade Hit by Sony and Fast Retailing but Outperforming Nikkei

Volatility in Fast Retailing and Sony have hurt the performance of our skew trade but looking forward we expect recent volatility to be absorbed...

Mio Kato

Microsoft – Thinking Through the ATVI Acquisition Further

Our initial thoughts on Microsoft’s bid for Activision Blizzard were sceptical in contrast to the majority of commentary on the deal. The more we...

Mio Kato

Sony - Microsoft's Activision Blizzard Acquisition Shakes Things Up

Microsoft's acquisition of Activision Blizzard is a huge move within the context of the gaming industry but we feel its eventual impact will belie...

Mio Kato

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