Saudi Arabia’s sovereign wealth fund kept buying Activision Blizzard Inc.’s stock last quarter, a commitment that may be tested as the video-game giant contends with a legal challenge over harassment and sexism in the workplace.
The Public Investment Fund (PIF) raised its holding in the maker of popular games like World of Warcraft by 13 percent to 37.9 million shares, with a market value of $3.6 billion, according to a regulatory filing. The sovereign investor has now more than doubled its stake since the fourth quarter and owns 4.9 percent in the company.
The stock ended the second quarter down 8 percent from its peak in mid-February. It’s lost nearly 10 percent so far this year.
Chaired by Crown Prince Mohammed bin Salman, the fund started investing in US video-game makers at the end of last year, when it bought more than $3bn worth of stock in Activision Blizzard, Electronics Arts Inc., and Take-Two Interactive Software Inc.
The crown prince has long been a fan of video games, saying in 2018 that his favourite diversion is Call of Duty series, Activision’s best-selling franchise. His charitable organisation owns one-third of Japanese games maker SNK Corp. and says it wants to increase its stake to 51 percent in the future.
But the industry hasn’t fared well lately, as the surge in play during the onset of the Covid-19 pandemic last year slows down.
Activision, the largest independent US game maker, is also facing a legal challenge to the so-called bro culture in games. Last month, Activision was sued by a California state agency, which alleged women at the company were subjected to constant harassment, unequal pay and retaliation.
An Activision investor is also suing the company for not initially disclosing the ongoing state investigation.
PIF raised its holding in the maker of popular games like World of Warcraft by 13 percent to 37.9 million shares.
The company, based in Santa Monica, California, has said it’s taking steps to improve the workplace environment.
Since 2015, the PIF’s assets under management have risen to $430bn from about $150bn. It has taken stakes in Uber Technologies Inc., put $45bn into SoftBank’s Vision Fund, and backed electric vehicle maker Lucid Motors Inc. Managed by Governor Yasir Al Rumayyan, the fund has outlined a plan to grow its assets to over SAR4 trillion ($1.1tr) by 2025.
Apart from Activision Blizzard, the PIF’s other top shareholdings were unchanged in the second quarter. The sovereign wealth fund’s disclosed holdings rose 3.2 percent in value during the period to $15.9bn. The S&P 500 Index advanced 5.8 percent.
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