Trouble in Activision Blizzard continues. After California’s lawsuit, the stepping down of its president J. Allen, and workers rejecting the law firm chosen to audit, this Tuesday, the investors of Activision Blizzard filed a class-action lawsuit.
Activision Blizzard is a trending topic right now, but not for its games. A Los Angeles law firm representing investors filed a class-action lawsuit against Activision Blizzard. The claim states that the company held relevant information about the California Department of Fair Employment and Housing investigation.
The Perfect Storm
In July, the State of California sued Activision Blizzard after a 2-year investigation on the company’s abusive work culture. This lawsuit unchained a series of events that included an employee walkout out last Wednesday and the company president J. Allen stepping down on August 3rd. The result in the market: a rapid decline of Activision Blizzard shares value during the last weeks.
On top of that, Frances Towsend, Executive Vicepresident, appears to have gone off the grid. After blocking several company employees fighting for a more fair workplace, she decided to close down her Twitter account.
What is this Class-action lawsuit, and how does it affect investors?
A class-action lawsuit is presented by one individual but is filed on behalf of everyone affected. All publicly traded companies must disclose to investors any information that could affect the company’s business negatively. This means that any investor who traded the company during the period of the investigation could seek repair.
This newly filed Class-action lawsuit claims that Activision Blizzard’s leadership was misleading and provided false information about the DFEH investigation. Furthermore, the complaint alleges that the company didn’t disclose the magnitude of the facts under investigation and its risks to Activision Blizzard’s investors.
The law firm behind this claim is the same one that filed another class-action for Cyberpunk 2077 mismanaged launch.
The ABK Workers Alliance reject Activision Blizzard's choice of law firm
Activision Blizzard chose WilmerHale, a law firm known as a 'union-butsing firm'. None of their four demands have been met so far.
Activision Blizzard’s Investors demand answers
The same Tuesday that J. Allen stepped down as president, Activision Blizzard’s earnings call with investors took place. Analysts and shareholders asked about the impact of the DFEH lawsuit during the call. Leaders offered vague answers and no precise plans on how the company would implement the change that workers demand.
Activision Blizzard announced Jen Oneal and Mike Ybarra as a replacement for J. Allen. This change in leadership is intended to answer the employees’ demands of real change after an initial underwhelming response. Besides the PR hassle, Activision Blizzard owes its investors and employees a concrete response.