Support NeoGAF

[3liteDragon]

More Activision Blizzard stockholders sue over Microsoft sale

Shareholders bring suit against Activision Blizzard and its board of directors

www.polygon.com

The shareholder is suing Activision Blizzard and its board of directors.

An Activision Blizzard shareholder filed a lawsuit against the game publisher and its board of directors over alleged Securities Exchange Act violations in its proposed plan for its sale to Microsoft. The lawsuit, filed by shareholder Kyle Watson, was filed in California on Thursday. Watson’s lawyers called Activision Blizzard’s plan for the sale, outlined in a recent Securities and Exchange Commission (SEC) proposal, “unfair for a number of reasons” — one of which, lawyers said, is that the board is looking to “procure for themselves and senior management [...] significant and immediate benefits.”

The lawsuit calls into question potential conflicts of interest, specifically that the deal “is not in the best interest” of Activision Blizzard, Watson, nor company stockholders, and “will produce lucrative benefits for the [Activision Blizzard’s] officers and directors.” It also referenced the “golden parachute” that some executives, like CEO Bobby Kotick, would receive should he be fired. The SEC filing, called a 14A, includes information necessary before shareholders vote in agreement. Elsewhere in the filing, Watson’s lawyers allege that Activision Blizzard’s Feb. 18 SEC filing is “materially misleading and incomplete,” violating the Exchange Act. It calls out missing information in the SEC filing relating to the “ad hoc committee” that ran the sales process, as well as information about “post-transaction employment” and other relevant data.

Watson is looking for the court to order Activision Blizzard to release a new SEC preliminary proxy statement that includes more facts and no “untrue statements.” Should the proposed transaction go through, Watson is looking for “rescissory damages.” As part of the proposed transaction, announced in January, Microsoft is slated to buy Activision Blizzard for $95 per share, for a total cost of $68.7 billion, the largest acquisition in Microsoft’s history. Activision Blizzard CEO Bobby Kotick continues to lead the company through the merger, despite calls for his resignation over his involvement in Activision Blizzard’s sexual harassment and gender discrimination allegations.

Kotick and the company are already under investigation with the SEC, according to a Wall Street Journal report. The Microsoft acquisition is also expected to be reviewed by the Federal Trade Commission, Bloomberg reported earlier this month. Microsoft intends to close this deal by the end of June 2023. Activision Blizzard shareholders are also suing the company, in a separate case filed in August 2021, alleging that corporate leaders’ negligence in its sexual harassment and discrimination reports caused the company’s shares to lose value. The company has also been accused of “union-busting” in recent weeks, as the company and workers testify in a National Labor Relations Board (NLRB) hearing to define a union for QA workers.

[Disclosure: Casey Wasserman is on the board of directors for Activision Blizzard as well as the board of directors of Vox Media, Polygon’s parent company.]

Update: An Activision Blizzard spokesperson provided the following comment to Polygon: “We disagree with the allegations made in this complaint and look forward to presenting our arguments to the Court.”

Court documents:

Watson v. Activision Blizzard, Inc. Et Al | PDF

Watson v. Activision Blizzard, Inc. et al

www.scribd.com

 

[FrankWza]

 

[ckaneo]

Honestly he should be happy to cash out. Activision isnt growing in anything but call of duty. Which we just saw with vanguard and the current title they delayed it is way to risky to put all your eggs into the basket of a franchise. What happens when the public stops caring about COD?

Bobby Kotick and the scandal was the perfect entry price and cover to sell

 

[Jennings]

Oh no, the billionaires are in-fighting. How will they carry on?

 

[Chiggs]

A single shareholder? This is an incredible development and I'm certain the case will likely make it very, very far in the incredible United States of America.

 

[adamsapple]

ShadeholdeR as in singular ?

 

[FStubbs]

Probably a Sony fanboy.

 

[jigglet]

Probably a Sony fanboy.

I picture his entire submission to the court being in the form of memes and gifs.

 

[Javthusiast]

 

[zeorhymer]

Kyle Watson is a shareholder in Winstead’s Business Litigation, Energy, and Financial Services Litigation Practice Groups. He joined the firm in September 2004 and practices primarily out of Winstead's The Woodlands, Texas office. Kyle represents clients locally, regionally and nationally in a wide variety of complex litigation matters in state and federal courts. He also practices before the American Arbitration Association.

If it's the same guy....yeah, he's chasing money.

 

[Punished Miku]

ShadeholdeR as in singular ?

Its Kyle. He's mad.

 

[RoboFu]

He saw the large pay out as an opportunity.

 

[Oddvintagechap]

It is undervalued.


That being said the sale will go through. Might have a slap on the wrist concession.

 

[DeepEnigma]

Kretos?

 

[azertydu91]

Hey if that means less money for Kotick then why not...If it is to try to stop that acquisition then not.

 

[Kilau]

Update: An Activision Blizzard spokesperson provided the following comment to Polygon: “We disagree with the allegations made in this complaint and look forward to presenting our arguments to the Court.”

 

[Ozzy Onya A2Z]

What a Kyle move. Footage of him representing himself in court just in...

 

[Dick Jones]

I picture his entire submission to the court being in the form of memes and gifs.

I dont want to say which GAF member it is, but his case has the backing of Ewing Oil. Now keep that under your hat.

 

[ManaByte]

Kyle Watson is a shareholder in Winstead’s Business Litigation, Energy, and Financial Services Litigation Practice Groups. He joined the firm in September 2004 and practices primarily out of Winstead's The Woodlands, Texas office. Kyle represents clients locally, regionally and nationally in a wide variety of complex litigation matters in state and federal courts. He also practices before the American Arbitration Association.

If it's the same guy....yeah, he's chasing money.

 

[SenjutsuSage]

Which one of you is Kyle Watson?

 

[ZehDon]

You've been unmasked at last, Bo_Hazem .

 

[Rusty Shackelford]

Stopped reading at "filed in California"

 

[C2brixx]

It is undervalued.


That being said the sale will go through. Might have a slap on the wrist concession.

How is it undervalued?

 

[Zeroing]

This is going to be interesting.

 

[THE DUCK]

How is it undervalued?

Yes, if anything it is overvalued considering the nature of the industry, one bad year/one bad game and all of the sudden things aren't so rosy.

 

[BusierDonkey]

 

[StreetsofBeige]

Probably a Sony fanboy.

Who bought Activision stock when it peaked at $99.46.

 

[anothertech]

Uh oh.

Got some fanboys sweatin

 

[TaiLopezFan]

Stop the ACQUISITION.

 

[lh032]

The only sane shareholder ! the world has gone mad!

 

[Ozriel]

It is undervalued.


That being said the sale will go through. Might have a slap on the wrist concession.

Nowhere close to being undervalued, especially after the news of COD skipping 2023.

 

[Skifi28]

I imagine he's making a thread as we speak starting with "Am I the only one..."

 

[Ozriel]

Uh oh.

Got some fanboys sweatin

I don’t think people usually sweat from hope

 

[T0kenAussie]

Nowhere close to being undervalued, especially after the news of COD skipping 2023.

Analysts came out the other day and said that the only reason the stock is stable is everyone is counting on that free $15 per share from MS in 9-12 months. If this idiot tanks the deal (he won’t) the stock will plummet as people panic sell. Probably could go as low as $50 per share if they do officially confirm the 2023 cod delay

 

[ToTTenTranz]

Watson is looking for the court to order Activision Blizzard to release a new SEC preliminary proxy statement that includes more facts and no “untrue statements.” Should the proposed transaction go through, Watson is looking for “rescissory damages.” As part of the proposed transaction, announced in January, Microsoft is slated to buy Activision Blizzard for $95 per share, for a total cost of $68.7 billion, the largest acquisition in Microsoft’s history.

I'm not sure what his angle is, nor does Polygon seem to know to be honest.

He wants more transparency in the SEC proxy statement, and accuses Activision's board of directors of using the acquisition to enact golden parachutes among themselves.
But I fail to see how this negatively affects the shareholder in question, whose share value got a sizeable boost since the announcement.

Something's missing here.

 

[T0kenAussie]

I'm not sure what his angle is, nor does Polygon seem to know to be honest.

He wants more transparency in the SEC proxy statement, and accuses Activision's board of directors of using the acquisition to enact golden parachutes among themselves.
But I fail to see how this negatively affects the shareholder in question, whose share value got a sizeable boost since the announcement.

Something's missing here.

Sometimes people just get litigation happy to get extra settlement payouts because the companies want to make the deal as quick and painless as possible

 

[Thirty7ven]

One thing is for sure, selling to MS isn’t in the best interest of AB and anyone who argues otherwise is a low IQ idiot.

 

[Leyasu]

One thing is for sure, selling to MS isn’t in the best interest of AB and anyone who argues otherwise is a low IQ idiot.

Explain for the low I.Q idiots

 

[T0kenAussie]

One thing is for sure, selling to MS isn’t in the best interest of AB and anyone who argues otherwise is a low IQ idiot.

When they became publicly traded they became honor bound to their investors and there’s 770 million something shares out there being propped up in value BECAUSE Microsoft offered to by

Artificial value of around 30 billion dollars, if that deal gets blown up. So if the deal fails say goodbye to that. And who’s the biggest losers in that situation? The devs whose jobs are cut and the shareholders and pension funds invested in that company

 

[Mattyp]

Yes, if anything it is overvalued considering the nature of the industry, one bad year/one bad game and all of the sudden things aren't so rosy.

No it’s not, not even in the slightest. Their profit has set year after year records this being the highest yet.

Their tank took a nose dive because of the pr bullshit, nothing to do with any of their business choices.

Microsoft bought at no premium compared to the price a few months prior (to all the bullshit) they paid unders.

 

[C2brixx]

84% of Activision stock is owned by large institutions. This lawsuit by a single shareholder is going nowhere. His lawsuit isn't even asking to stop the deal, but to require Activision to refile SEC documents with more information.

"Watson is looking for the court to order Activision Blizzard to release a new SEC preliminary proxy statement that includes more facts and no “untrue statements.” Should the proposed transaction go through, Watson is looking for “rescissory damages.”

 

[The_Mike]

One shareholder cries
Analytic Armchair Gaf: Microsoft overpaid for this trash.

Yes, if anything it is overvalued considering the nature of the industry, one bad year/one bad game and all of the sudden things aren't so rosy.

Nowhere close to being undervalued, especially after the news of COD skipping 2023.

Armchair analysts at it again.

Unlike Sonys deal with Bungie, which analysts said was way overpaid (which is the opposite of what many Gafs believes), there's not really any article about Microsoft overpaying for Activision Blizzard. Quite the opposite, where Pachter even says Sony paid too much for Bungie, whereas Microsoft got ActiBlizzard straight from the bargain bin.

The Bungie comparison has nothing to do with this news besides showing how delusional some of you are in here.

But, this is Gaf, where we dictate exclusives sells best while trash games like Call of Duty is shit no one buys.

 

[Rest]

He doesn't want a bunch of Microsoft stock? What a dummy.

 

[Topher]

Unlike Sonys deal with Bungie, which analysts said was way overpaid (which is the opposite of what many Gafs believes), there's not really any article about Microsoft overpaying for Activision Blizzard. Quite the opposite, where Pachter even says Sony paid too much for Bungie, whereas Microsoft got ActiBlizzard straight from the bargain bin.

What "analysts"? In both links it is Michael Pachter saying Sony overpaid. So you are really just presenting one guy's opinion and that guy is notorious for being wrong.

 

[SSfox]

 

[Bo_Hazem]

You've been unmasked at last, Bo_Hazem .

 

[cormack12]

Watson’s lawyers called Activision Blizzard’s plan for the sale, outlined in a recent Securities and Exchange Commission (SEC) proposal, “unfair for a number of reasons” — one of which, lawyers said, is that the board is looking to “procure for themselves and senior management [...] significant and immediate benefits.”

Ummmmm...............

 

[Dr Bass]

One shareholder cries
Analytic Armchair Gaf: Microsoft overpaid for this trash.





Armchair analysts at it again.

Unlike Sonys deal with Bungie, which analysts said was way overpaid (which is the opposite of what many Gafs believes), there's not really any article about Microsoft overpaying for Activision Blizzard. Quite the opposite, where Pachter even says Sony paid too much for Bungie, whereas Microsoft got ActiBlizzard straight from the bargain bin.

The Bungie comparison has nothing to do with this news besides showing how delusional some of you are in here.

But, this is Gaf, where we dictate exclusives sells best while trash games like Call of Duty is shit no one buys.

For crying out loud, never quote Patcher on anything. His prognostications and opinions have proven to be completely the opposite of reality nearly 100% of the time. And his summary of how much Sony paid for Bungie being too much is absurd. No one talks about “cost per developer” in acquisitions, at least I’ve never ever heard of that. And I’m in the software industry. It’s always to do with revenue/profits and multiples that are associated with those businesses. And he left out the retention bonus, seemingly.

You can think what you want but again, these deal prices aren’t pulled out of nowhere. Whether or not there is long term wisdom in either of them (bungie and activision) is another discussion, but when it comes to trying to quote an “authority,” you could not pick a worse source. Good grief.

 

[Bernkastel]

 

[KungFucius]

I don't know the details but if the deal does include over the top benefits for the board, then I think he is right to complain. Why should they get a disproportionate amount of gains instead of having it spread across the shares. The board and CEO have a ton of shares and will make out through them already.