There’s another investor suit mounting against Activision, this one alleging fraud in Bungie split

    
20

The controversy over the sudden split between Destiny 2 developer Bungie and longtime publishing partner Activision continues with the announcement that “global investor rights law firm” Rosen Law claims it is filing a class action lawsuit “on behalf of purchasers of the securities of Activision Blizzard, Inc. […] from August 2, 2018 through January 10, 2019.” The lawsuit will reportedly allege that Activision Blizzard “made false and/or misleading statements and/or failed to disclose” that the split between the two companies was imminent and that it would “foreseeably have a significant negative impact on Activision Blizzard’s revenues.”

“According to the lawsuit, defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (1) the termination of Activision Blizzard and Bungie Inc.’s partnership, giving Bungie full publishing rights and responsibilities for the Destiny franchise, a series of science fiction-themed video games, was imminent; (2) the termination of the two companies’ relationship would foreseeably have a significant negative impact on Activision Blizzard’s revenues; and (3) as a result, Activision Blizzard’s public statements were materially false and misleading at all relevant times. When the true details entered the market, the lawsuit claims that investors suffered damages.”

You may recall that this isn’t the first bit of legal hullabaloo associated with the termination of Activision and Bungie’s partnership, as earlier this month a separate law firm, Pomerantz LLP, announced that it would be investigating Activision for possible fraud on behalf of investors considering a class action over “securities fraud or other unlawful business practices.”

Activision’s stock price has struggled over the last few months, and analysts have expressed uncertainty about the company’s growth outlook in the immediate future. This latest action, which will seek “to recover damages for Activision investors under the federal securities laws,” is certainly not going to help matters.

newest oldest most liked
Subscribe to:
Reader
leihngwei

Ah, ambulance chasing lawyers are still a thing.

Reader
rafael12104

Heh. And let’s be clear here, the lawyers putting together the class action, better have proof or they will have to pay some court costs.

As I’ve said, this is not that unusual and was tried before against EA and Dice for Battlefield IV and it went nowhere.

Short of them having something from Activision saying that they were going to extend the contractual agreement with Bungie, it will not be enough.

Reader
Kickstarter Donor
NecroFox4

I was under the impression that their deal wasn’t supposed to end until 2020. And that might be the whole point of this suit; Activision Blizzard never revealed to investors that the end date of the agreement had been moved up by a year. It was a surprise to everyone except Bungie and A/B employees. And that’s a problem.

Reader
rafael12104

It might be. I read (will find the link,) that the deal was 2020 but they had the option to terminate after the release of Destiny 2.

I’ll find the link to see if there is more clarity.

Reader
Tanek

Maybe, just maybe, if the investors and management stop pushing game companies to squeeze every last penny from customers, they will have a better reputation and more stable growth? As it stands now, the decline is just met with even worse business practices to make money and when those collapse, too…well, I guess the upper management will glide over to the next victim on a golden parachute, so they have zero incentive to change. Never mind.

Reader
Siphaed

“Investors suffered damages”….this is why I’m all for the Stock Market to go away. It’s nothing more than a bunch of people getting rich by banking on other company’s profits for a certain period of time. It’s gambling, through and through. Worse though, is because the gamblers -“investors”- have some grasping hold on the say so of the direction of a company, the company in turn makes sweeping decisions to favor them more than their employees and/or customers.

So to investors who lose a tiny bit of money because of a company making a light change without their say so: Go eat some sand.

Reader
Kickstarter Donor
NecroFox4

You really don’t have any idea how the stock market works, or why it is absolutely essential, do you?

Reader
McGuffn

Looking at that chart you can see the delayed reaction as investors suddenly figure out people don’t have phones.

Reader
Loyal Patron
Patreon Donor
Armsbend

Oh another tidbit from the Nvidia call today, that Activision most certainly will not tell you, is that Chinese gamers are playing less. Doing other things in the emerging market.

Let’s destroy our reputation on a declining market. Well done Geniuses.

Reader
Bruno Brito

that Activision most certainly will not tell you, is that Chinese gamers are playing less.

Correct me if i’m wrong, isn’t Xi an extreme conservative leader?

Reader
Kickstarter Donor
Loyal Patron
Tobasco da Gama

Yes, but he’s been in charge since 2012, so I don’t see what relevance that has to a trend that switched from positive to negative only recently.

Xijit
Reader
Kickstarter Donor
Xijit

Because he recently overhauled (keelhauled is probably more accurate) the Chinese gaming market to insulate the anti-west nationalist propaganda he has ratched up to condition the Chinese population for the inveatable aouth china sea he has been driving towards.

Reader
Bruno Brito

He closed his grip on power recently. He was in charge but not complete charge yet.

Reader
Loyal Patron
Patreon Donor
Armsbend

Compared to China’s past leaders he might be considered the most liberal, progressive leaning.

Reader
Bruno Brito

But what kind of progressivism are we talking about? Because there are differences. I’m not about to praise a dictator, but the guy does have some vision for what he wants for China. I don’t think that changes the fact that his views on more “sidethings” are conservative tho.

Mordyjuice
Reader
Mordyjuice

Blizzard should have stayed with Vivendi, seems they had a healthier corporate relationship, unless Activision was part of Vivendi as well; either way at least Vivendi knew their way around investment laws.

Reader
Loyal Patron
Patreon Donor
Armsbend

People have said it before – these types of things are not uncommon. People get burned they want some money back – that doesn’t mean they’ll get it.

That said, the stock’s price is going to get worse before it gets better. My bet is the low 30s this time next year.

Reader
Bryan Correll

Vivendi (which already owned Blizzard) purchased Activision in 2007 and it was Vivendi that actually crammed them together into Activision Blizzard. Vivendi sold most of it’s majority stake (to AB itself) in 2013 and has since fully divested of AB stock.

Reader
Zora

If investors feel there’s a lack of transparency -now- we’re all in for a psychedelic 2019 with all the behind-the-scenes malarkey that internal restructurings tend to equate to in big companies

Better than fiction, only it’s free and it’s real!

deekay_000
Reader
Patreon Donor
deekay_000

i feel like everything to do with blizzcon correlates much more strongly with the valuation drop than the bungie license exit.

i think these investors also highly overestimate the value of the product to their dividend payouts.