author: Michael Zegar
Activision Blizzard Scrutinized by State Authorities
Activision Blizzard's case is getting more and more dicey. State treasurers who own shares in the company have expressed a desire to meet with its board of directors. It seems that the drastic drop in the California publisher's stock price has caught their attention.
We have more news about Activision Blizzard's doings and unfortunately, these too do not herald anything good for the California-based company. Axios reports about six state treasurers, who, in a letter dated November 23, expressed the desire to meet with representatives of the corporation's management to discuss the investment risks hanging over the company (most likely related to the recent dramatic drop in its stock price). The treasurers are to assess the board's conduct, and thus give their opinion on the SOC investment group's demands, which we wrote about two weeks ago.
“We think there needs to be sweeping changes made in the company. We're concerned that the current CEO and board directors don't have the skillset, nor the conviction to institute these sweeping changes needed to transform their culture, to restore trust with employees and shareholders and their partners," comments by Michael Frerichs, Illinois State Treasurer for Axios.
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Activision has not commented on the matter at this time. However, a SOC representative stated that the company responded to the letter. The aforementioned treasurers manage trillions of dollars in assets, but it is not known how many Activision shares they currently own, and therefore how much voting power they have on the board of directors.. Frerichs additionally confirmed that the state of Illinois has investments in Activision Blizzard and thus is feeling the effects of the company's drastic stock price decline:
“One thing the Treasurers bring is also a bit of a spotlight here and a little public pressure as well. So it's not all just about the number of dollars and number of shares that we have. But we're long-term investors and we want to see those risks that caused that penalty addressed, so they don't happen again. You can point to, ‘Hey, we paid the victims, we're making them whole.’ But if you're continuing a culture that creates new victims in the future, you are creating more risk for your company."
“This particular case has been waiting for the board to step in and do an investigation.A true investigation, an outside investigator. And, I mean, what was it, two weeks ago that they said they stand by the CEO,” said Deborah Goldberg, Massachusetts state treasurer, to Axios.
Treasurers hope to meet with Activision executives on Dec. 20. Their sudden interest in the gaming market may stem from New York State's announcement last year of plans to withdraw its $226 billion pension fund from fossil fuel companies. This is obviously due to the growing popularity of green transportation. Thus, treasurers have most likely increased their investment in new, promising industries - including video game companies.