Activision Blizzard and Electronic Arts are part of a large group of major firms where insiders within the company have been profiting from buyback programs.
The Washington Post conducted an investigation which revealed a trend where company officials sell their shares right after buyback announcements.
Washington post found found at least 500 insiders within various companies sold their shares during buyback programs. The shares were sold within a 15-month period spanning 2017 and 2018. Over 50 of those insiders were CEO’s.
Bobby Kotick, CEO of Activision Blizzard, sold nearly four million shares ($180.8 million) the day after the February 9th announcement. These shares sold for 15% higher than he would have sold them for before the stock jumped based on the buyback news.
The troubling fact is that Activision didn’t actually repurchase any of it’s shares. Two years later and not one share has been purchased…
Electronic Arts is another example, CEO Andrew Wilson sold shares worth $2.1 million at prices that were 12% to 19% higher than before the announcement.
Robject Jackson, SEC Commissioner told The Washington Post: “Isn’t it market manipulation for a company to say we’re doing a buyback and then an officer says, ‘I’m going to sell’?”