Activision Blizzard shares are on track for a 19-month low following allegations that CEO Bobby Kotick knew about sexual misconduct claims.
- READ MORE: Sexual harassment claims, lawsuits, and several high profile departures – what’s going on with Activision Blizzard?
A new report alleges that Kotick, who has been CEO of Activision Blizzard since its inauguration in 2008, knew about sexual misconduct claims at the company for years.
These allegations have already affected Activision Blizzard’s share prices, with J.P. Morgan’s Alexia Quadrani slashing her rating of Activision stock from overweight to neutral.
Quadrani said (via MarketWatch) that she was “reluctant to downgrade” a stock that’s been underperforming, but “recent negative headlines” surrounding sexual-misconduct allegations “introduce a significant amount of uncertainty into this story.”
Activision Blizzard shares fell 4.4 per cent on Thursday alone and are down 12.8 per cent over a three-day period, putting them on track to reach the lowest they’ve been since April 2020. The company’s shares have fallen 25.8 per cent over the last three months.
The most recent allegations seem to have compounded issues, as over 200 employees staged a walkout in protest of CEO Bobby Kotick’s continued employment. Additionally, several Activision Blizzard shareholders have called upon Kotick to quit.
“It’s clear that the current leadership repeatedly failed to uphold a safe workplace,” they said.
In response to recent allegations against Kotick, the CEO has shared a statement saying the report “paints an inaccurate and misleading view of our company, of me personally, and my leadership”. He added that “anyone who doubts my conviction to be the most welcome, inclusive workplace doesn’t really appreciate how important this is to me”.
Despite these continuing issues, Quadrani remains hopeful about Activision Blizzard’s gaming portfolio, with a stock valuation at a “15x trough multiple against this year’s guided EPS of $3.76.” That said, she doesn’t expect Activision shares to outperform until there’s further clarity on the company’s position amid allegations of sexual misconduct.
“Duration of this risk factor is also not known at this time,” she added.
Today’s share prices for Activision Blizzard have hovered around $61 to $62. This is down 19.24 per cent over the last month.
Meanwhile, Activision has reportedly stated that its zero-tolerance policy won’t apply to recent allegations against CEO Bobby Kotick because it can’t find any evidence.