Activision Shareholder Sues Over Stock Buyback

Well it sure didn't take long for the lawsuits to start flying, did it? What do you think? Does this guy have a case or what?

The CEO of Activision Blizzard is buying back billions of dollars of discounted stock from Vivendi, giving insiders - but not Activision - a "staggering windfall" of more than $600 million, a shareholder claims in a derivative lawsuit. Todd Miller filed a shareholder derivative complaint in Superior Court against Activision, its 11-man board of directors, and Vivendi, the entertainment and publishing conglomerate, alleging breach of fiduciary duties, waste of corporate assets and unjust enrichment.

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Stock buybacks are more often than not a complete waste of capital.

they are pissed off that the CEO and a private company are buying shares at a discount and they aren't making money off of the sale. I am a bit torn on that. In general as long as the sale is being done legally I see nothing wrong with it. If I want to sell my share to somebody else and do so legally I don't care if that only makes money for myself and the person I sell it to and not others involved. That is our personal money. Same here, As long as the sell from Vivendi to that private firm is legal it doesn't matter if it doesn't give money to the other share holders. It is an exchange of shares not a buy back at that point in time as that is two parties, not the company selling and buying the shares. Now if some step of that process was done illegally then yes the lawsuit is valid. I don't know much legality when it comes to stock so I don't know where the line is drawn as far as what is and isn't legal. I also don't know how the sell between the two went down to know if it was done in a proper way or not.

As for the buy back of the other shares by Activision Blizzard itself. who knows what good that will do for the company itself other than give more control to the existing share holders now that one larger party is gone.

Selling stocks internally is not illegal.

However, it severely undermines the stocks value and causes them to depreciate at mach 10, which is what the investors are pissed off about. If you sell a billion in stocks internally for 500 million, not only do you drive the stock price down, you cause outsider interest in the company to tank as well because they see the sharp stock price decrease.

So the investors being pissed off in this case makes sense.

The only thing that would make this work out well to their advantage is whoever finally owns Actishit if the company trading hands causes a huge stock price increase.

The stock has seen a nice jump since the buy back was announced. The stock was hovering around $14-$15 and jump to $17-18.

ShamisOMally said:

Selling stocks internally is not illegal.

However, it severely undermines the stocks value and causes them to depreciate at mach 10, which is what the investors are pissed off about. If you sell a billion in stocks internally for 500 million, not only do you drive the stock price down, you cause outsider interest in the company to tank as well because they see the sharp stock price decrease.

So the investors being pissed off in this case makes sense.

The only thing that would make this work out well to their advantage is whoever finally owns Actishit if the company trading hands causes a huge stock price increase.

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The way the buyback is structured its an explicit wealth transfer from Activision to Vivendi. Activision could be so cash deprived, bankruptcy in the near future is quite likely. Anyone not part of the cash buy back will have their stock crater.

They are basically screwing the remaining share holders to the benefit of a few or Vivendi.

jpm100 said:

The way the buyback is structured its an explicit wealth transfer from Activision to Vivendi. Activision could be so cash deprived, bankruptcy in the near future is quite likely. Anyone not part of the cash buy back will have their stock crater.

They are basically screwing the remaining share holders to the benefit of a few or Vivendi.

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Actually they are screwing Vevindi shareholders because Acti/Bliz was the company that was a revenue stream for them and vevindi was about to rape them to stay afloat. now Vevindi has their capital to try and pull it out and a 20%+ stake in Acti/Bliz. This isn't a bad thing for either company. It just means that Vevindi gets their money now to shore up their own finances, AND that Acti/Bliz gets to rest knowing that they will not be pillaged.

Now lets just see if they can Monetize wow further without alienating their player base further.