Rats jumping off the Blizzard ship?

Spotted this while checking financials.

Acti-bliz is set to announce earnings later this month. When a director and the CEO start dumping their own companies stock before earnings are set to go public… well it’s not because they know earnings are going to be amazing, lets just say that.

About SynCaine

Former hardcore raider turned casual gamer.
This entry was posted in Mass Media, Random, World of Warcraft. Bookmark the permalink.

31 Responses to Rats jumping off the Blizzard ship?

  1. Dave says:

    Wait! They are set to publish earnings and the director (Brian Kelly) and CEO (Robert Kotick) are selling shares? Smells like insider trading.

  2. Jason says:

    my initial thoughts too. It’s illegal to dump stocks if you know from your insider position they are going to tank.

  3. Bonedead says:

    Martha Martha Martha!

  4. Moo says:

    Yeah, it seems unlikely they would blatantly violate insider trader laws in this way, by selling ahead of the public announcement of poor earnings.

  5. Moo says:

    Martha Stewart however was not the CEO of the company whose stock she sold, making it a little easier to get away with. And even then she didn’t get away with it.

  6. Tipa says:

    Yeah, this is a good way to get some hard jail time. I doubt they are dumping stock for this reason. I would imagine this is a capital-building move to take an interest in a new project.

  7. syncaine says:

    I’m sure they did it legally, but that’s not the point.

    The point is you don’t sell a ton of stock in a company you think is going to do well in the future. Things have been very rosy for a long time in acti-bliz land, so I wonder why they are bailing now?

  8. Morane says:

    Remember that officers of publicly traded companies are prohibited from making stock transactions for a couple weeks before earnings announcements.

    So if they wanted to make some trades this quarter, say for tax purposes, they need to do it before the lockout period starts.

    That’s not to say that earnings are going to be stellar, but it’s not really insider trading when your trades are public knowledge, as all officers trades are.

  9. Thallian says:

    If you have stock in any of these companies I hope you sold it or will sell it soon

  10. Beau says:

    YES! It’s been a while since I got to read a “WoW is going to collapse” posts from you…lol.

    If you keep it up long enough, one day you might be right. Granted, it might take a few years, but at least you can say “I told you so!” :)

    Beau

  11. Coppertopper says:

    Seems like a smart move. Between rock band, wow, and cod acti-bliz has peaked. Nowhere to go but down. I would call cashing in at peak value a smart move. Maybe that is why they are the CFO/CEO because they are smart bastards?

  12. Jason says:

    @Coppertopper

    I’m sure you meant to say Guitar Hero, but I’ll point it out anyhoo. Harmonix/EA are Rock Band.

    I think you’ve got a point though. They’ve been catching light in a bottle for quite awhile now. The bubble has to burst sometime.

    Jason (resident drunken idiot of Channel Massive who likes to sign his comments because it makes them 10x more valid)

  13. Herc says:

    ATVI as a company is healthy based on their financial statement. Althought I’m not really into consumer driven stock right now.

    2 million shares is nothing … just look at how it affected the current stock.

    Titles like WoW, Call of Duty and Guitar Hero add (Diablo and Starcrat) makes this stock (ATVI) worth looking into.

    P.S. I don’t own this stock.

  14. syncaine says:

    The whole ‘music’ game genre has tanked, and dropped off much faster than anyone predicted. Like most fads, it came in fast, and left even faster.

    As for the stock itself, the market is up again today, ATVI is down 7%. The 2 million shares was the highest money dump by any officer in that report, and ATVI was once again on the list a bit further down.

    If you believe that we have already seen the bottom, and that right now the fastest gains of the recovery are being seen (market prediction bla bla, sorry), dumping so many shares is not exactly good market timing.

  15. PTD says:

    Not enough to talk about WAR server closures, so you try to nail WoW in some way instead! ;)

    On a side note, I did pick up WAR from my local Circuit City for 10 bucks on Saturday! I haven’t yet broken the plastic, but I couldn’t pass that up…

  16. p@tsh@t says:

    Um, no. What Morane said. Tempest in a tea cup. They filed their 10-K at the end of February and had their earnings call a month ago.

    Likely they either have their shares in a 10b5-1 plan for officers and directors or the their self-imposed trading blackout period is up. Many pub co’s adopt a blackout period where insiders may not trade for some period of time before or after earnings or other announcements.

    Its been a month since earnings and about 2 weeks since the 10-K, so its likely this is one of the few times a year that insiders are actually permitted to buy or sell shares without much fear of being accused of trading while in possession of material nonpublic information.

    Kelly hasn’t traded since August of 2008, so this is likely his only real opportunity since the wheels came off of the economy to do any trading.

    Given the economy, I’ll chalk it up to profit taking, but you can read the tea leaves anyway you want.

    Here’s all their insider transactions if anyone wants to data dive:

    http://idea.sec.gov/cgi-bin/own-disp?action=getissuer&CIK=0000718877

  17. Herc says:

    I also gotta lean on profit taking due to volatility of the market or maybe who knows Syncaine knows something we don’t, that Blizzard is doomed!

  18. Bonedead says:

    You could write about WAR server shutdowns and spin it in an anti-wow way easily. I don’t see what all the fuss is aboot!

  19. Mikejl says:

    Insider trading .. now that’s a real MMO game.

  20. Wilhelm2451 says:

    Legal stuff aside, it is also true that people sell stock in companies that are doing well all the time, especially people who get a good chunk of their compensation in stock.

    Or do you think that every time Steve Jobs sells stock that Apple is about to tank?

    You’re going to have to work harder on your anti-Blizzard agenda.

  21. smakendahed says:

    @Bonedead: He doesn’t need to, Heartless_ is doing a good enough job of that. Check out : http://hgamer.blogspot.com/2009/03/corollary-to-that.html

    Yup, the big wigs tend to sell massive amounts of stock all the time. I remember looking at some of the volume of stock sold by some of our big cheeses… man it was sick. They didn’t jump ship, they were just exercising option that were going to expire or that had vested.

  22. Nat says:

    A+ for Potshot – the only post so far that actually has a feaking clue about the subject!

    @Potshot – thanks, saved me the time of having to write up a long post.

  23. syncaine says:

    Profit taking is all well and good, WHEN YOUR STOCK IS UP. ATVI is way down since the merger, even worst than the market average. If you know your company is going to be doing well in the future, you don’t sell your shares when the price is this low, regardless of vesting.

    And they have quarterly earnings coming up, which is the piece I think will shed some light on all of this.

  24. coppertopper says:

    Unless you call WoW, GH, COD, Starcraft weak IPs, what you will see is a downturn in ATVI stock price which doesn’t describe a company on the rocks, but will reflect an economy on the rocks. It is actually a ‘buy’ recommendation right now from many brokers.

  25. Nat says:

    Looks like a lot of options were executed by insiders. Yep rats leaving a ship, oh wait…rats that just made a metric shit ton of money.

    http://finance.yahoo.com/q/it?s=ATVI

    The stock is actually trending up since Jan and as pointed out above most of these guys have been in a blackout period for a while.

  26. syncaine says:

    And now lets look at their competitor, since people seem to think everyone sells share all the time…

    http://finance.yahoo.com/q/it?s=ERTS

    Looks a bit different eh?

    Or an example of officers selling because they are expecting a drop,

    http://finance.yahoo.com/q/it?s=NVDA

  27. Nat says:

    Dude seriously, just admit you misunderstood what was going on with regard to the insider sales, didn’t do research to see that stock options were the cause and let it go.

    Most of the big EA options were exercised between earnings reports, same with NVDA – what is your point?

    If your point is that the guys at ATVI expect their stock might drop, then sure I’ll agree with that. EVERYONE is betting that stocks will continue to fall. Hell they are looking at putting up-tick rules back in place to combat all the short selling.

  28. Herc says:

    Syncaine do you have a background in buying and selling your own stocks? If yes then cool. Because alot of brokers like copper said it’s a buy right now and when you compare it to it’s peers it actually has a better p/e ratio and a better 5yr eps growth forecast(not like are the true measuring stick but this is all taken to account) add to that they are sitting on ton of cash right now.

    Also you are assuming that the price they sold the stock for was the same price they bought it. Or maybe they are just cutting losses or maybe just like you said something is up.

    I don’t know enough about ATVI stock but I won’t dismiss it cause of the said IPs. Plus it has no debt and sitting on a nice cash for cushion so if anything theyll just change add another IP if all of WoW, COD, starcraft, diablo, and guitar hero epicly fails.

    It’s one thing to hate WoW, but this is just amazing syncaine /golfclap.

    Does anyone here actually own’s this stock? Did you add more or sold during this recession? Can you try selling ATVI stock to me or move me away from it in 2-3 sentences. I’m already assuming syncaine doesn’t own this one =)

  29. syncaine says:

    I don’t own ATVI now, no. I did up until right after the merger, but selling at that time had little to do with the stocks short term future, I just needed the money for something else. Got lucky on that one I guess. I do own and continue to buy NVDA.

    The risky thing about ATVI right now is that WoW makes up a huge chunk of their earnings, and any dip in that will send the stock plummeting (not because the company will itself fail of course, but just market perception). As I said above, Guitar Hero is already a fallen IP, as the music fad is over. EA has a similar problem with Rock Band, but RB was never as big for them as GH is for ATVI.

    And Nat, not everyone is saying sell right now. If anything, some people are worried now about missing the bottom. Given the situation right now though, in all honesty no one really knows and everyone is just guessing, more so than usual.

    When the quarterly earnings come out, they will tell us if the selling was just business as usual, or indeed an early indicator.

  30. Bonedead says:

    Less stock talk and more DF talk imo!

  31. syncaine says:

    Sorry sorry, DF post coming in a bit. Although it’s about us having a PvE adventure. We did gank one person though.

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