Activision Blizzard now has securities fraud accusations to face.
2019 has not started well for Activision Blizzard and the companies under its umbrella. After the last quarter of 2018 saw the departure of multiple key executives (including Blizzard co-founder and former president Mike Morhaime), the cancellation of the Heroes Global Championship and Heroes of the Dorm, as well as the loss of the Destiny franchise, both consumers and investors are questioning what is going on at Activision Blizzard. The hit hasn’t only come from consumers’ anger at Activision Blizzard, but also from the business end as well. Now, the company may have to deal with the potential legal consequences of their actions. Pomerantz Law Firm has announced that it is now investigating the company for securities fraud.
“Pomerantz LLP is investigating claims on behalf of investors of Activision Blizzard, Inc.,” the law firm says. “The investigation concerns whether Activision and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.”
Activision Blizzard’s latest actions could possibly put it under a legal microscope.
What exactly could be going on? If the law firm takes legal action on behalf of shareholders, it may relate to the recent split with Bungie. How far in advance was Activision aware of how far they diverged from their agreement with Bungie without informing investors? There may be a possible cause to investigate for insider trading if stocks were sold immediately prior to the announcement of the split.
Just because there is an investigation does not necessarily mean that the company is guilty of anything (yet). However, it could mean an interesting turn in the roller coaster ride that has been Activision Blizzard since late October 2018. Now that there is possible legal action in the mix, it brings to mind the Carpenters lyric: we’ve only just begun.
Do you think Activision Blizzard will face legal action? Could this mean the company could face rougher times ahead? Let us know in the comments below!