Topic: Activision In Peril

[ImperialOne]

Well, it would seem the would-be-litigants to Viacom have some more problems... the SEC is investigating them as well as three other game companies with regard to their accounting skills.  While it is hard to speculate on the final outcome, the loss of nearly 10% of Activision stock value today probably doesn't bode well.

Link for the latest in the story:  
http://story.news.yahoo.com/news?tmpl=story&cid=562&ncid=1211&e=1&u=/ap/20030721/ap_on_hi_te/video_games_sec

[Toasty0]

The only section of this investigation Activision need worry about is the following:

Quote:
UBS Investment Research analyst Michael Wallace explained in a research note Monday that some distributors have been known to "stuff the channel," or ship product to retailers in order to meet their quarterly revenue expectations, then take the product back from the retailer via excess reserves without affecting the company's income statement.

There is nothing in this investigation that should cause share prices to plummet $10. Something like that kind of drop is usually the result of a leaked upcoming yearly or quarterly report. As tomorrow (7-22) is the release date for Activision's yearly report...

Otoh, if there's been a sudden revision of the report since the SEC came a'knocking about Take Two then there could be an investigation of Activision in the making.

Best,
Jerry  

[ImperialOne]

Well, it would seem the would-be-litigants to Viacom have some more problems... the SEC is investigating them as well as three other game companies with regard to their accounting skills.  While it is hard to speculate on the final outcome, the loss of nearly 10% of Activision stock value today probably doesn't bode well.

Link for the latest in the story:  
http://story.news.yahoo.com/news?tmpl=story&cid=562&ncid=1211&e=1&u=/ap/20030721/ap_on_hi_te/video_games_sec

[Toasty0]

The only section of this investigation Activision need worry about is the following:

Quote:
UBS Investment Research analyst Michael Wallace explained in a research note Monday that some distributors have been known to "stuff the channel," or ship product to retailers in order to meet their quarterly revenue expectations, then take the product back from the retailer via excess reserves without affecting the company's income statement.

There is nothing in this investigation that should cause share prices to plummet $10. Something like that kind of drop is usually the result of a leaked upcoming yearly or quarterly report. As tomorrow (7-22) is the release date for Activision's yearly report...

Otoh, if there's been a sudden revision of the report since the SEC came a'knocking about Take Two then there could be an investigation of Activision in the making.

Best,
Jerry