Why Activision Blizzard Stock Is Under Pressure Today

Activision Blizzard Stock Falls As SEC Gets Interested In The Company’s Work Culture

Shares of Activision Blizzard continued to move lower after recent reports indicated that SEC had started an investigation of the company’s workplace culture. Earlier, a union filed a federal complaint regarding the company’s work culture while California sued the company for the same reasons.

Activision Blizzard stated that it was working with regulators to resolve the complains that it had received. The company has recently announced that Julie Hodges from Disney would become Chief People Officer, effective September 21, as Activision Blizzard tries to solve its problems with the workforce.

The stock has been under pressure in recent months as investors were worried about the company’s problems on the HR front. Activision Blizzard stock traded close to the $100 level at the beginning of June but found itself under strong pressure and moved below the $75 level.

What’s Next For Activision Blizzard Stock?

It is not surprising to see that Activision Blizzard stock is under pressure due to problems on the HR front as workforce is the key asset of any company that makes video games. Improving the situation may take time while the company may also face costs due to lawsuits.

Interestingly, analyst estimates have improved in recent weeks. Currently, analysts expect that Activision Blizzard will report earnings of $3.83 per share this year and $4.4 per share in the next year, so the stock is trading at roughly 17 forward P/E which is an attractive valuation level in the current market environment.

However, it remains to be seen whether value-oriented traders and investors will rush to buy Activision Blizzard shares as workplace changes take time while the stock has significant headline risks. In addition, there are plenty of stocks with a strong upside trend available at the marketplace right now, so Activision Blizzard stock will certainly need more positive catalysts to attract more investors and change the current downside trend.

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