Has the market bottomed? Who knows?

But what we do know is that $ATVI has a buyer in the form of $MSFT for $95 a share. As I type this the stock trades at $78 per share exactly...which if closed as agreed upon would represent a 21% upside for arbitrageurs.

Why the discount? Investors are weary of the FTC. Understandably so. The FTC has been very active in M&A and will likely continue to be so. However here is why I believe they will not be as inclined to get involved.

Ultimately the FTC would have to make the determination whether it's worth their time and public dollars to get involved in video games.

As simple as it sounds...how do you think that will fly with taxpayers, in an environment where taxpayers are struggling with rising costs...the public backlash against an expensive court case over video games...seems to be something the market hasn't priced in. Little wonder that reports suggest this deal could pass through the FTC within the next month.

Even if the deal does get torpedoed....Activision trades at a multiple of 24x TTM earnings, and is at a price which looks at worst case, reasonable. Given the strength of it's business, it would likely make an attractive acquisition for other companies outside of Microsoft.

There may be other dips which offer higher upside...however remember Buffett's #1 Rule...Don't Lose Money. This idea does that....and it will likely make money too!