Activision Blizzard shares drop after reports allege sexual misconduct

Activision Blizzard shares drop after reports allege sexual misconduct

Activision Blizzard CEO Bobby Kotick speaks at the CNBC Evolve conference November 19th in Los Angeles.

Jesse Grant | CNBC

Activision Blizzard shares closed down more than 6% Tuesday after a report from The Wall Street Journal alleged CEO Bobby Kotick knew about sexual misconduct allegations at the videogame company.

According to the report, Kotick failed to inform the board of directors about the allegations on many occasions, including an alleged rape, the Journal reported.

An Activision spokesperson told CNBC in a statement that the WSJ report was “inaccurate” and a “misleading view” of the company’s CEO.

“We are disappointed in the Wall Street Journal’s report, which presents an inaccurate and misleading view of Activision Blizzard and our CEO,” an Activision Blizzard spokesperson said. “Instances of sexual misconduct that were brought to his attention were acted upon.”

In a video message sent to employees Tuesday, Kotick addressed the report and said anyone who doubts his “conviction to be the most welcoming, inclusive workplace doesn’t really appreciate how important this is to me,” according to a transcript posted to the company’s website.

Activision’s board of directors backed Kotick in a statement Tuesday and said it “remains confident” that the CEO “appropriately addressed” work issues brought to his attention.

The news comes as the video game company faces a series of investigations over its workplace practices, including how it handled allegations of sexual misconduct and discrimination.

In July, the California Department of Fair Employment and Housing filed a lawsuit that alleged the company has a “frat boy culture” that’s a “breeding ground for harassment and discrimination against women.”

Blizzard President J. Allen Brack left the company shortly after the news. He was mentioned in the lawsuit as allegedly being aware as early as 2019 that employees were leaving because of sexual harassment at the company.

As of Monday’s close, Kotick owned 4.09 million Activision shares valued at $285 million, according to FactSet. His compensation package in 2020 was valued at more than $154 million, the Journal previously reported.

Correction: A prior version of this story included an incorrect share ownership count for Kotick.

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