Things are looking up for Activision Blizzard (ATVI).
The video game publisher has had a rough go of things over the last year, starting with multiple sexual harassment accusations and a plethora of lawsuits from both past and former employees.
A Wall Street Journal investigation in late 2021 also alleges that Chief Executive Officer Bobby Kotick was aware of the harassment issues within the company and swept them under the rug.
Activision’s board responded to the Journal article by issuing a statement saying “The Board remains confident that Bobby Kotick appropriately addressed workplace issues brought to his attention.”
Activision Blizzard has also been working steadily at repairing its reputation ever since, starting with announcing initiatives to "develop software tools and training programs to improve workplace policies and practices for employers across the technology industry."
It also committed to work on its policies and practices, including the development of anti-harassment training and conducting regular reviews of its effectiveness.
While the company's efforts didn't stop more lawsuits from rolling in, two of them were especially troubling as they came from company investors, who felt Activision Blizzard's upcoming merger with Microsoft (MSFT) was unfair to its shareholders and that it had withheld crucial information from them.
What's New With the Activision Blizzard Lawsuit?
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U.S. District court judge Percy Anderson has dismissed the lawsuit filed by a group of investors, saying it suffered "a lack of particularity," according to a report from GamesIndustry.Biz.
"To the extent plaintiffs allege that defendants must have known sexual harassment and discrimination were endemic by virtue of their respective positions at the company, the [first amended complaint] does not establish the requisite facts to support such a conclusion," he said.
In another section of the document confirming the dismissal, Anderson calls the backdrop of the #MeToo movement "too vague a concept to raise a strong inference of scienter."
“We take seriously our commitment to become the most welcoming, inclusive company in our industry, and we take equally seriously our responsibility to communicate accurately to our shareholders," Activision Blizzard told TheStreet via email. "We are pleased with the court’s ruling that plaintiffs failed to establish their claims.”
Anderson's decision is not final, however. If the investors that filed the original lawsuit wish to try again, they are able to do so within 30 days.
Activision Blizzard also wrapped up another major lawsuit in late March between itself and the Equal Employment Opportunity Commission, which was settled when the company announced the formation of an $18 million fund "to provide monetary relief and significant injunctive relief" to those affected by harassment at work, sexual or otherwise.
What Does This Mean For Activision Blizzard?
Naturally, this ruling makes Activision Blizzard look more favorable in the eyes of many. Its stock is still recovering from the dip it took when the WSJ story came out, but it has yet to hit the stride it was at beforehand.
The company has also announced the addition of two women to its board of directors, a move that comes after it was found to be in violation of a California law that requires publicly traded companies with six or more people on the board to have a minimum of three of them be women.
But a WSJ story published April 21 alleges some new information that could nudge Kotick's reputation further south. It reports that Meta's Chief Operating Officer Sheryl Sandberg aided Kotick twice in pressuring Daily Mail not to publish a story that reported on a temporary restraining order filed against Kotick by an ex-girlfriend.
Sandberg and Kotick previously dated for three years from 2016 to 2019.
Activision Blizzard provided a comment to TheStreet on the matter, saying, "The Board has been aware of the circumstances reported involving an incident in 2014...The Board, through its counsel Skadden Arps, has done a thorough examination of the facts and circumstances of the events, satisfied itself that there was no merit to the allegations, and notes that they concern a personal relationship that has nothing to do with the business of the Company. The Board continues to have full confidence in Mr. Kotick's leadership and his ability to run the Company.”
A spokeswoman for Meta, the corporate name that Facebook adopted last year, said: “Sheryl Sandberg never threatened the MailOnline’s business relationship with Facebook in order to influence an editorial decision."
