Microsoft's $75B Acquisition of Activision Cleared of Insider Trading Concerns by SEC

Securities regulators concluded their investigation into significant investments Barry Diller, Alexander von Furstenberg, and David Geffen made in Activision Blizzard shortly before Microsoft Corp MSFT acquired the company in 2022. 

The Securities and Exchange Commission (SEC) and the Justice Department investigated these options purchases for potential insider trading but found no grounds for charges, the Wall Street Journal reports. 

Microsoft completed its $75 billion acquisition of Activision late last year, marking its biggest deal ever, which took nearly two years to overcome numerous global regulatory challenges. 

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Before this acquisition was announced, Barry Diller, Alexander von Furstenberg, and David Geffen made significant investments in Activision Blizzard. They purchased options to buy Activision shares at $40 each, which were already profitable due to the stock trading at about $63. This transaction led to unrealized profits of tens of millions of dollars once Microsoft’s acquisition was public.

The SEC recently informed Diller, von Furstenberg, and Geffen that it would not pursue accusations of insider trading. 

Similarly, a lawyer for Diller mentioned not receiving any further inquiries from the Justice Department since 2022. 

Diller defended the trades as “simply a lucky bet” and emphasized that they had not acted on any material nonpublic information regarding the Microsoft-Activision deal.

Additionally, federal regulators’ scrutiny affected Diller’s efforts to obtain a gaming license in Nevada, where he serves on the board of MGM Resorts International MGM. 

Meanwhile, analysts cite Microsoft’s position at the forefront of the AI revolution, which is backed by positive findings from AI customer interactions and the emerging monetization of the transformative Copilot. 

They mark a pivotal moment for Microsoft, likening it to an ‘iPhone Moment’ that could significantly alter Microsoft’s cloud growth trajectory.

Microsoft stock gained over 29% in the last 12 months. Investors can gain exposure to the stock via SPDR Select Sector Fund – Technology XLK and Fidelity MSCI Information Technology Index ETF FTEC.

Price Actions: Microsoft shares traded higher by 0.74% at $397.87 on the last check Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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