In an investigation into possible insider trading in the billion-dollar sale of the gaming giant Activision to Microsoft, a breakfast meeting attracts the attention of the researchers.
When Microsoft put $68.7 billion on the table early this year for the acquisition of gaming giant Activision Blizzard, many shareholders were very happy. Among the lucky ones were some well-known names from the business world. Media mogul Barry Diller and music bobo David Geffen together cashed $ 59 million in profit.
A solid return on their investment, especially since they only got into Activision a few days before the sale. Geffen, Diller and his stepson Alexander von Furstenberg – the son of the Belgian-American designer Diane von Furstenberg – bought back shares on January 14 at 40 dollars each. On January 18, Microsoft bought Activision for $95 each.
That timing quickly caught the attention of US authorities, who suspected insider trading was involved. Last month, the US Department of Justice officially opened an investigation into the matter.
That investigation shows that Activision CEO Bobby Kotick had a brunch appointment with von Furstenberg and his wife a few days before the businessmen bought their shares, The Wall Street Journal reports. The key question is whether the impending takeover was discussed there or not.
Those involved claim not. “We had zero knowledge of the transaction, and it takes a certain amount of credulity to think that we would go through with such a transaction,” Diller told The Wall Street Journal. “It’s equally unlikely to believe that a sophisticated professional like Bobby Kotick would talk about an impending deal at a social meeting.”
According to Diller, Geffen came up with the idea purely because he thought Activision was undervalued and therefore saw a chance that it would be acquired or delisted. “It’s a simple coincidence,” he says. “I didn’t wait until I turned 80 to participate in what would be very clear fraud.”
Activision also talks in a statement about a ‘pure social meeting with friends in a popular restaurant’. “Mr. Kotick has not shared any information there about a possible transaction with Microsoft.”
For Geffen and Diller, the profit they made from the sale is pocket money. Geffen’s net worth is estimated at more than $10 billion, a fortune he made in the music and film industry. Diller is worth $4.5 billion, a fortune he collected from the TV world and as an early investor in several tech companies.