What you need to know
- Activision Blizzard is being sued by New York City.
- The lawsuit claims that CEO Bobby Kotick was not fit to negotiate the sale of the company to Microsoft.
- Activision Blizzard has been embroiled in legal trouble since a lawsuit was filed in July 2021 against the company.
- That lawsuit alleged that Activision Blizzard allowed sexist workplace practices to go unpunished.
Activision Blizzard and its CEO Bobby Kotick continue to be targetted by allegations and new lawsuits. Now, New York City is joining in.
New York City is suing Activision Blizzard (as shared by Axios), claiming that Kotick was "unfit" to negotiate the sale of the company to Microsoft. The lawsuit is specifically being filed by the New York City Employees' Retirement System, who own stock in Activision blizzard.
"Given Kotick's personal responsibility and liability for Activision's broken workplace, it should have been clear to the Board that he was unfit to negotiate a sale of the Company," the suit states. As part of the lawsuit, New York City Employees' Retirement System is demanding information on the other unknown buyers who were reportedly interested in Activision Blizzard.
On Jan. 18, 2022, Microsoft agreed to acquire Activision Blizzard for $95 per share, a deal worth almost $69 billion. Activision Blizzard shareholders overwhelmingly agreed to the purchase on April 28, 2022, with over 98% of the shares voted "Yes."
The deal, which is slated to close sometime in Microsoft's fiscal year ending June 30, 2023, will add Activision Blizzard to Xbox Game Studios and Bethesda Softworks as an Xbox first-party publisher. It's the largest video game industry acquisition ever, overshadowing Take-Two Interactive's purchase of Zynga and Tencent's investment into Supercell.
Do they really want to embarrass the also rans?
We already know MS was the only outfit willing and able to buy the *full* company for *cash*.
End of story.
As Warren Buffet pointed out, the stock would be running in the 40's or lower if not for the buyout. At least now we know who the 2% was that was stupid enough not to realize the stock would never again see even $70 this decade, if ever.
This is BS and looks absolutely like a move to sabotage Microsoft's purchase. It's so plain to see that it makes me cringe.
"Given Kotick's personal responsibility and liability for Activision's broken workplace, it should have been clear to the Board that he was unfit to negotiate a sale of the Company," the suit states." I would agree with this, had the shareholders not had a say, and the fact that they basically all said "yep, go nuts" (and why wouldn't they, given the dumpster fire that Activision Blizzard is at the moment) means it wasn't a sole decision of Kotick.
Yeah, I'm pretty sure the shareholder vote alone will see this dismissed.
This probably the managers of the NYC pension fund covering their rear over having invested (late?) in Activision. MS is paying $95 a share which is nominally higher than the pre-lawsuits $85-94 but that was a year ago. Two years by the time the sale clears. Two years of 8%+ (11% is likely by fall) inflation so in practice it is a loss for anybody who bought high.
Of course, in the unlikely case the deal is blocked Activision collapses to the 40's as Buffet pointed out.
So yes, this suit, like the others will get laughed out of court on day one.
Yeah. If there were a fraud story it would be different - people who made decisions were ill informed. But it just doesn't seem like that's the case here. There was nothing wrong with the company's financials, and they were all looking at them. They were all looking at the agreed upon price when they voted. Do they suddenly think they'd have gotten a better deal because they found out Kotick was ... dumber than they thought? He is surprisingly dumb, I will give them that.
They are fishing for some document they can use to sue Kotick personally.
They've been suing (repeatedly) since last fall, long before MS started talking buyout, insisting Activision isn't giving them what they want. The problems they face, long term, is the transparency in the (long) document Activision sent to shareholders beford the vote to sell (98%), the 98%, and the actual performance of recent releases. The suit assumes Activision would be worth more absent the scandals. As a lawyer would say: "assumes facts not in evidence".
"The suit assumes Activision would be worth more absent the scandals. " I mean, jackass is leaving (with a mighty golden parachute!) and the company is being bought by one of the best companies to be bought by in their industry. I'd bet money (not actually) that shareholders are fine with all of this.
And this is why the Retirement System of Alabama owns a ton of commercial real estate rather than large investments in stock. Leases will always continue to climb on average.
Unless it's a mall. 😉
Tech parks, however are a good investment.
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