Although Activision’s split with Bungie was largely welcomed by the Destiny community, company investors are suspicious that there has been fraudulent activity from behind the scenes. Third-party lawyers from Pomerantz LLP are currently investigating the sudden announcement, which has been linked to sizeable dips in the company’s stock.
Activision Blizzard seems confident about the move, stating in a Securities & Exchange Commission filing that it doesn’t believe the loss of Destiny will have a noticeable impact on its bottom line. This hasn’t stopped the news from plummeting stock more than 10%, prompting investors to worry that the surprise development could cost millions in the long-run.
Considering that the Destiny franchise has sold more than $325 million at retail, shareholders aren’t convinced that they had all of the facts prior to the split. Pomerantz LLP, a legal firm that touts itself to be “premier” in the areas of corporate, securities, and antitrust class litigation, has now opened an investigation into Activision Blizzard to ensure that the disclosure was, in fact, lawful.
It remains unclear what, or who, is specifically the target of the fraud investigation, as both sides remain distinctly silent during the process. Fortunately, during this time, stock looks like it has started to recover, however its current $46.50 at the time of writing still pales in comparison to the $51.35 prior to the announcement.
KitGuru Says: It looks as though investors might have been just as surprised as the rest of us by the announcement. I don’t wish to see Activision fail, by any means, but the company certainly needs to change how it operates if it wishes to keep all sides happy.