Skip to content

Microsoft’s Activision/Blizzard Acquisition Under Scrutiny

Microsofts-ActivisionBlizzard-Acquisition-Under-Scrutiny

Following reports of three investors being suspected of insider trading, Microsoft’s massive Activision Blizzard acquisition is now being investigated.

The accusation stems from the purchase of a considerable number of Activision Blizzard shares by three American businessmen, Alexander Von Furstenburg, Barry Diller, and David Geffen, shortly before the company was acquired by Microsoft.

The allegations are being investigated by The Justice Department and Securities and Exchange Commission. The options were reportedly purchased from JPMorgan Chase for roughly $40 per share at a time when the stock was trading around $63. The price is currently about $80, implying a profit of around $60 million.

Barry Diller told The Wall Street Journal that the trio had spoken with officials, but that no insider trading had occurred.

Barry Diller
Barry Diller

Diller told The Wall Street Journal:

“It was simply a lucky bet. We acted on no information of any kind from anyone. It is one of those coincidences.”

Diller went on to explain that his stepson, von Furstenberg, had previously purchased stock in Activision Blizzard and expected the firm would be sold or go private in the near future.

Alexander Von Furstenburg
Alexander Von Furstenburg

Von Furstenburg did not comment but apparently, Diller has got a previous relationship with Bobby Kotik who was quoted as “a long-time friend”. The two men both served on Coca-Cola’s board of directors.

The Microsoft Activision Blizzard buyout was investigated by the US Federal Trade Commission early last month. This was due to the fact that if the FTC had felt that the acquisition would jeopardize the potential of fair competition, the deal may have been stopped.

David Geffen

Thankfully, this has not been the case so far for Microsoft.

Microsoft’s takeover talks began three days after Activision Blizzard’s toxic workplace report was released, according to evidence released last month. When it came to acquiring Activision Blizzard, Microsoft appeared to sense blood in the water and chose to take advantage of the company’s lower share price.

Is this all just chance or excellent timing, or is there anything more nefarious going on here? What are your thoughts on the matter?