Microsoft Activision Blizzard Purchase Reportedly Leads to Insider Trading Investigation
When Microsoft announced its intent to purchase Activision Blizzard on January 18th, the Call of Duty publisher's stock price saw a significant increase. According to reporting by The Wall Street Journal, the Justice Department and Securities and Exchange Commission are investigating Barry Diller, David Geffen, and Alexander von Furstenberg, a trio that purchased significant stock options for Activision Blizzard on January 14th. The options were apparently purchased from JPMorgan Chase around $40 per share, when the stock price was around $63. The price is now around $80, which would put their current profit around $60 million. Speaking to The Wall Street Journal, Diller confirmed the trio has spoken with regulators, but claimed no insider trading took place.
"It was simply a lucky bet," Diller told The Wall Street Journal. "We acted on no information of any kind from anyone. It is one of those coincidences."
Diller went on to say that von Furstenberg, his stepson, had previously purchased stock in Activision Blizzard, and believed that the company would either be sold in the near future, or go private. The Wall Street Journal did not receive comment from von Fustenberg. However, Diller does have a previous relationship with Activision Blizzard CEO Bobby Kotick. The two men both served on Coca-Cola's board of directors, and Diller has called Kotick "a long time friend." The paper estimates that Diller, Geffen, and von Furstenberg spent $108 million for the right to buy 4.12 million shares of Activision Blizzard stock.
Microsoft's intent to purchase Activision Blizzard was a major shock to the video game industry. If the deal goes through next year, it will put a number of major franchises under the Xbox umbrella. Microsoft has confirmed its intentions to keep the Call of Duty franchise on PlayStation platforms, and possibly even bring the series to Nintendo Switch, as well. However, Activision Blizzard's massive back catalogue of games would be a huge boost to Xbox Game Pass, and the move could lead to renewed interest in some dormant franchises. A lot of people stand to make a lot of money on the deal, including Diller, Geffen, and von Furstenberg.
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