Kara Swisher, CNBC’s Andrew Ross Sorkin, Martha Stewart and Barry Diller at CNBC’s “The Next 25” Gala in New York.
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Entertainment mogul Barry Diller strongly denied the idea that he, his stepson, longtime close friend and colleague David Geffen engaged in insider trading in what he claimed was “a case lucky bet”. Activision Blizzard Call option is reported now under investigation by the Department of Justice and the Securities and Exchange Commission.
Diller, Geffen and Diller’s stepson Alex von Furstenberg put together a big bet on shares of Activision just days before the video game maker said it had agreed to a buyout by Microsoft on Jan. , The Wall Street Journal reported on Tuesday night.
Activision shares and the value of those call options skyrocketed when news of the sale became public.
Diller, who confirmed to The Journal that he has been contacted by regulators, in a statement to CNBC, said “None of us know any person or any source or any thing.” about Microsoft’s potential acquisition of Activision.”
“We acted simply on the belief that Activision was undervalued and therefore likely to go private or be acquired,” Diller said.
“And, if we had any such information, we would never transact on it – that increases the confidence to believe we would do so 3 days before Microsoft and Activision release it.” make their announcements.”
Diller told The Journal, “It was simply a gamble.”
The trio has “an unrealized profit of about $60 million from options trading, based on a recent Activision stock price of about $80,” according to people familiar with the transaction, The Journal reported.
The newspaper said that the Justice Department was conducting a criminal investigation into whether options trading violated insider trading laws, while the SEC was conducting a civil investigation into the question. similar.
The SEC and the Justice Department declined to comment to CNBC.
Geffen and Von Furstenberg, son of Diller’s wife, legendary fashion designer Diane von Furstenberg, did not immediately respond to requests for comment.
Microsoft declined to comment. Activision did not immediately respond to a request for comment.
Diller is a member of the board of directors of Coca-Cola.
Last week, Activision Blizzard CEO Bobby Kotick said he would not run for re-election as Coke’s director, saying he wanted to focus on the Microsoft deal.
– Additional reporting by Steve Kovach
