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Activision Blizzard May Be Accused of Securities Fraud by Investors

Last Updated September 23, 2020 12:21 PM
Melanie Kramer
Last Updated September 23, 2020 12:21 PM

Pomerantz Law Firm has issued a shareholder alert and, it says, is investigating Activision Blizzard and its “officers” for possible securities fraud or other “unlawful business practices.”

Activision Blizzard announced its split from Destiny creators Bungie on January 10. Immediately following the announcement Activision shares plummeted nearly 10%. Investors are concerned over the loss of revenue from the popular title, with Activision confirming it would receive no revenue from the game in 2019.

Destiny developers Bungie have been given back the full rights and responsibilities to Destiny.

Now, according to a press release  from law firm Pomerantz:

“Pomerantz LLP is investigating claims on behalf of investors of Activision Blizzard, Inc.”

Little information is given by Pomerantz LLP. The press release says Destiny earned $325 million in its first five days of launch and that “the stock price fell sharply during intraday trading on January 11, 2019.”

Pomerantz LLP does confirm that:

“The investigation concerns whether Activision and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.”

A Surprise Break in a 10-Year Agreement with Bungie

Such an investigation, if pursued, could look at how far in advance Activision was aware of the departure from its agreement with Bungie without informing investors. If stocks are sold immediately prior to an announcement it can be considered insider trading.

Investors may be upset. The split was a surprise break in what should have been a ten-year agreement for Activision Blizzard and Bungie. The agreement wasn’t due to expire until 2020.

Though there have been rumors  of disagreements between publishers Activision and designers Bungie, a statement  issued by Bungie on January 10 thanks Activision for their partnership and says:

“With Activision, we created something special. To date, Destiny has delivered a combination of over 50 million games and expansions to players all around the world.”

Investigations of this nature are common and can often disappear without a lawsuit.

Pomerantz says it has recently been involved with a securities class action settlement on behalf of Petrobras investors  recovering a reported near $3 billion. It’s lead counsel in an action against Barclays Bank PLC and is also pursuing a lawsuit on behalf of Google parent Alphabet shareholders. All as per the Pomerantz LLP website.

Elsewhere Elon Musk is having a bad week as his SpaceX program commences layoffs.