Rumour: Activision Face Financial Insecurity
Sounds ridiculous doesn't it? How can the CoD factory, which sells a bajillion, kajillion games per year, be the victim of financial meltdown? Well, remember when Vivendi merged with them way back when? Well they now have 61% control. They also have some hefty debts, which has lead Wedbush Securities analyst Michael Pachter, of Pach Attack fame, to theories a scenario in which Vivendi could claim a $5 billion loan, against Activision's name. Then leaving Activision to pay it all off, with interest, running to a final figure of $8.5 billion. Even for Activision, that is no laughing matter.
"Borrowing of $5 billion would permit a dividend of $8.5 billion. As the holder of 61 percent of Activision's common stock at March 31, 2013, we estimate Vivendi would receive approximately $5.2 billion in cash, easing its mounting debt concerns. Vivendi needs money and as of tomorrow [today at time of writing], controls Activision. Activision has money. It's pretty easy to reach an appropriate conclusion from those two facts."
Now, bear in mind, whatever you may think about Michael Pachter, we all know he's made some patently ludicrous, and downright idiotic, predicitions in the past. But when it comes to financial matters, he is recognised as an authority for a reason. Having said that, this is not something he overtly predicted as a likely solution, only a possible and most expedient one. The end result is still unclear at this time, but it is certainly something we should be paying close attentjon to.
Remember as well, before you start pumping the air in glee and screaming how they 'had it coming'. Whatever you may think of Activision as a company, it is still made up of real, regular people just doing their jobs. 7000 of them to be precise. Something like this could and will, if true, lead to many of them losing said jobs. Hundreds, even thousands of regular Joes, just like you and me, left unable to provide for themselves. Because, one last thing to remember, in situations like this, it is never the big guys that get screwed. And those guys are the ones making all the decisions.
Just stop and think, okay? This is no joking matter.
Many thanks to our colleagues at Joystiq for bringing this to our attention.