Activision Blizzard Inc. released new information in a Securities and Exchange Commission filing late Friday meant to address lawsuits alleging its proxy statement regarding its agreement to be bought by Microsoft Corp. is “incomplete and misleading.”
While Activision Blizzard
said it feels its original proxy was complete, it decided to “voluntarily supplement certain disclosures” and that it “specifically denies all allegations that any additional disclosure was or is required or material.”
At the top of the additions came the following: “Activision Blizzard received a voluntary request for information from the SEC and a grand jury subpoena from the DOJ, both of which appear to relate to their respective investigations into trading by third parties -– including persons known to Activision Blizzard’s CEO -– in securities prior to the announcement of the proposed transaction. Activision Blizzard has informed these authorities that it intends to be fully cooperative with these investigations.”
In early March, the Wall Street Journal reported that Barry Diller, Alexander von Furstenberg and David Geffen were under federal investigation for possible violations of insider trading laws by buying $40 Activision Blizzard options just before Microsoft
announced its $95-a-share, or $68.7 billion, offer to buy the videogame publisher. The mid-January bid set off a string of deals to scoop up videogame publishers.
The company also presented data on how it sees its segments performing within its “long-range plan,” which foresees estimated revenue of $9.17 billion in 2022, $11.73 billion in 2023, and $12.41 billion in 2024. Analysts surveyed by FactSet estimate revenue of $8.59 billion in 2022, $10.05 billion in 2023, and $10.5 billion in 2024.
From Activision, the company expects revenue of $3.98 billion in 2022, $4.69 billion in 2023, and $4.94 billion in 2024. Analysts expect $3.57 billion revenue from Activision in 2022, $3.78 billion in 2023, and three analysts estimate a consensus of $3.99 billion in 2024, according to FactSet data.
Blizzard is expected to bring in $2.08 billion in 2022, $3.75 billion in 2023, and $3.96 billion in 2024, according to the company, while analysts forecast $1.99 billion in 2022, $2.92 billion in 2023, and three analysts have an average estimate of $3.15 billion in 2024.
King Digital revenue is estimated at $2.91 billion in 2022, $3.23 billion in 2023, and $3.44 billion in 2024. Analysts had forecast a consensus of $2.69 billion in 2022, $2.8 billion in 2023, and three analysts expect an average $3.07 billion in 2024, according to FactSet data.
The filing also addressed the subject of the continued employment of Bobby Kotick, Activision Blizzard’s chief executive, who has been a magnet of controversy concerning his compensation and how he handled widespread sexual harassment allegations at the company.
“No discussions or negotiations regarding post-closing employment arrangements with Microsoft occurred between Microsoft and Mr. Kotick prior to the approval and execution of the merger agreement and the transactions contemplated thereby, or have occurred subsequent to such approval and execution, through the date hereof.”
Activision shares rallied to close up 26% at $82.31 on Jan. 18 following the announcement of the offer, and have not traded higher since. Shares last closed down 0.2% at $78.93 on Thursday, and are down 19.3% over the past 12 months, compared with a 13.4% decline in the iShares Expanded Tech-Software Sector ETF
and versus a 5% gain on the S&P 500 index