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9. Re: See Ya suckers Mar 9, 2004, 09:26 WaltC
Before you leave I'd check those suitcases again--I'll wager lawyers have cleaned out 2/3 of the contents...;)

Personally, I'd think any manager of a pension fund (which people rely on for retirement income) should have his tail kicked for investing in a 3d-game publisher's stock.

Although it's difficult for me to imagine what Activision would have needed with almost $750M in stock proceeds for their primary business of game publishing over a limited amount of time, it also isn't clear from the allegations of the suit as published in these accounts whether the complaint is against particular, named individuals in the company who were seeking to profit personally from the sale of their own stock at what the litigant alleges were inflated prices, or against the company for offering stock at those prices.

The fact the suit makes both allegations leads me to think the litigant doesn't have any concrete information and is fishing in broad directions to hopefully uncover something during the process of the suit. Generally, if you're a major stockholder and officer in a company and you start to dump large quantities of your own personal stock in that company, the effect is that it reduces the share price, so this complaint seems strange to me on that basis.

What this really sounds like is someone who manages the pension fund now believes he paid too much for the Activision stock he bought, and is disappointed with his investment return, thinks he made a bad investment, and is engaged in a CYA operation relative to the pension fund he manages to see if he can recoup some of the money he invested in Activision stock. Shareholder suits brought by disgruntled investors whose predictions about the future of the stock didn't pan out are all too common, and used to be so commonplace as to be a real burden to some companies.

The thing about all stock purchases is that they are 100% elective, and no one is forced to buy the stock regardless of share price. Additionally, the SEC has required for years that companies temper short-term forecasts with standard warnings that no one should buy the stock for future expectations which are based on current or past performance. You'll see this warning at the bottom of the Activision press release at Yahoo which is linked by the story above. It's the SEC's way of letting people know that their money is never guaranteed to grow, or even to retain its value, when stocks are purchased. All investors know this going in but still are prisoners of their own forecasting.

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It is well known that I do not make mistakes--so if you should happen across a mistake in anything I have written, be assured that I did not write it!
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