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Activision Blizzard shares partly recover after sex-harass suit as two execs exit

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Activision Blizzard’s stock clawed back losses from a slump spurred by a bombshell sex-harassment suit last month after the company said two executives had left, even as it reported higher-than-expected quarterly revenue.

The video-game giant forecast second quarter adjusted revenue at $1.92 billion, compared with analysts’ estimates of $1.89 billion, according to analysts surveyed by Bloomberg. Activision Blizzard shares were trading at $83.12 shortly after market open on Wednesday, up 4 percent.

The share boost also came after the company behind games like “Call of Duty,” “World of Warcraft” and “Candy Crush” said at least two top executives had left the company. 

The first, J. Allen Brack, was head of Blizzard, the division behind “World of Warcraft” where much of the worst sexual misconduct allegedly took place. Brack — who left Tuesday to “pursue new opportunities” — was singled out by name in the California suit for being aware of sexual misconduct and even enabling it. 

Activision Blizzard stock price
Activision Blizzard shares are still down about 13 percent from a month prior.
Google Finance

The second executive to depart was Jesse Meschuk, who served as head of human resources at Blizzard, according to Bloomberg

News of Meschuk’s departure came just hours after a damning Axios report on Activision Blizzard’s “broken HR department.” Employees were bullied, belittled and retaliated against after reporting harassment to HR, according to the report. 

During Tuesday evening’s investor call, president and chief operating officer Daniel Alegre warned that fallout form the sexual harassment report could hurt the company’s bottom line.

J. Allen Brack
Blizzard head J. Allen Brack left Tuesday.
Blizzard Entertainment

“If we experienced prolonged periods of adverse publicity, significantly reduced productivity or other negative consequences related to this matter, our business likely would be adversely impacted,” Alegre said. “We’re carefully monitoring all aspects of our business for any such impacts.” 

During a question and answer session with analysts, just two out of seven questions related to the sexual harassment suit — and executives largely reiterated previous boilerplate statements about taking harassment seriously.  

“We’ll continue to investigate each and every claim and compliant that we receive,” said Kotick. “When we learn of shortcomings we will take decisive action.” 

Activision Blizzard shares are still down about 13 percent from a month prior. 

Activision Blizzard stock first tanked after the state of California filed a sexual harassment against the company last month for allegedly fostering a “frat bro” office culture full of rape jokes, groping and sexual harassment that even drove one female employee to suicide. 

Blizzard Entertainment employees and supporters protest for better working conditions in Irvine, Calif., on Wednesday, July 28.
Chief operating officer Daniel Alegre warned that fallout from the sexual harassment report could hurt the company’s bottom line.
AP

The company initially dismissed the suit as “distorted, and in many cases false,” prompting an apology from CEO Bobby Kotick as hundreds of the company’s employees walked out from work in protest



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