Activision Shareholders Sue Over Microsoft Buyout
Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.
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Two Activision Blizzard shareholders have filed separate lawsuits challenging the game publisher’s impending $69 billion acquisition by Microsoft, alleging the deal unfairly benefits Activision “insiders” like CEO Bobby Kotick at the expense of public shareholders.
On Thursday, Activision shareholder Kyle Watson filed suit against the video game developer in U.S. District Court for the Central District of California, Polygon reported. Watson’s suit alleges that Activision’s proxy filings with the Securities and Exchange Commission in the wake of the Microsoft deal were “materially misleading and incomplete”—in violation of the Securities Exchange Act—and did not contain information about the equity and stock rewards that executives like Kotick stood to gain from the merger.
In turn, the lawsuit claims that the Microsoft acquisition “is not in the best interest” of Activision and its shareholders while “produc[ing] lucrative benefits for [Activision’s] officers and directors.” Watson is requesting that the court order Activision to file new paperwork with the SEC that includes the omitted data, and is seeking damages should the Microsoft deal proceed.
Meanwhile, a separate Activision shareholder, Shiva Stein, filed a separate lawsuit in U.S. District Court for the Southern District of New York that lodges similar complaints to Watson’s suit—alleging that Activision’s proxy filings on the Microsoft deal weren’t comprehensive and violated the Securities Exchange Act. As Polygon noted, Stein is an exceptionally prolific securities plaintiff, having filed 124 securities complaints in a three-year span between 2018 and 2020.
In a statement to dot.LA, an Activision Blizzard spokesperson said the company “disagree[s] with the allegations made” in both complaints and “look[s] forward to presenting our arguments to the court.” Attorneys for both Watson and Stein did not immediately return requests for comment.
While probes into alleged workplace misconduct at Activision have widened recently, the company did get a win in the courts this week. A California judge allowed Activision’s planned $18 million settlement with the U.S. Equal Employment Opportunity Commission over sexual harassment and discrimination claims to proceed, The Verge reported. The ruling denied attempts by the state’s Department of Fair Employment and Housing to block the federal settlement, out of fears that it would harm the state’s own case against the company.
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Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.
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