- Federal prosecutors and securities regulators are investigating three men with an unrealized profit of ~$60 million on the options trade, betting on Microsoft Corp's (NASDAQ:MSFT) acquisition of Activision Blizzard Inc (NASDAQ:ATVI), the Wall Street Journal reports.
- The Justice Department investigated for possible violation of insider-trading law by the options trades violated insider-trading laws. The SEC separately conducted a civil insider-trading investigation.
- Diller, von Furstenberg, and Geffen bought options to purchase Activision shares at $40 each on January 14 in privately arranged transactions through JPMorgan Chase & Co (NYSE:JPM). Activision shares were trading around $63 at the time, implying the profitability of the options.
- The traders spent~ $108 million to acquire the right to buy 4.12 million Activision shares. The options are currently worth ~$168 million. The value of the options would rise further if the deal closed at $95.
- Activision confirmed on January 18 that Microsoft would acquire the company for $95 a share. The shares ended that day at $82.31, gaining 26%.
- Price Action: ATVI shares traded higher by 1.18% at $81.03 in the premarket on the last check Wednesday.
