(C) Reuters. Activision Blizzard Stock Crumbles amid Workplace Practice Investigation
Activision Blizzard (NASDAQ:ATVI) is a video game developer that’s been in the headlines for all the wrong reasons.
The company’s workplace complaints have spiraled out of control. Now, the SEC is investigating the company, and its CEO, Bobby Kotick, has been subpoenaed.
Its stock has fallen into a tailspin amid the September volatility, now off 28% from its all-time high. Things are pretty bad right now, but after such a massive drop in the stock already behind ATVI, I am neutral on the name.
Activision Blizzard Plunges Further
It’s been quite the fall from grace for shares of Activision Blizzard. Its workplace practice issues could continue to act as a significant overhang on ATVI stock.
Undoubtedly, there’s a push for change, with employees speaking out and some leaders and executive team members leaving the company. The real question on the minds of investors is whether the company can truly change for the better, and take the appropriate steps to repair its reputation.
In any case, further management turnover could continue amid the federal investigation that has investors hitting the Sell button. Recently, Chief Legal Officer Claire Hart left the company amid the recent rush for the exits.
It’s really tough for investors to gauge how much worse things can get after such a drastic drop. We’ll just have to wait and see, as Kotick is called to court.
Despite the profound pressure, ATVI stock has already been punished.
In addition, there are some big releases coming up, including Diablo 2 Resurrected and Call of Duty: Vanguard. Such releases are still likely to be overshadowed by the SEC investigation, however.
Wall Street’s Take
According to TipRanks’ analyst rating consensus, ATVI stock comes in as a Strong Buy. Out of 15 analyst ratings, there are 13 Buy recommendations, and two Hold recommendations.
The average ATVI price target is $113.14. Analyst price targets range from a low of $100 per share, to a high of $125 per share.
Activision Blizzard has already been hit with some price target downgrades amid the stock’s latest tumble. Still, analysts don’t appear ready to turn their backs on the name in a major way amid the latest negative headlines.
Could further management exits induce a relief rally in a name that’s now in oversold territory? We’ll have to wait and see.
Disclosure: Joey Frenette owned shares of Activision Blizzard at the time of publication.
Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.
Activision Blizzard Stock Crumbles amid Workplace Practice Investigation
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.