Signaling confidence in their company, Activision Inc.'s executives bought more than 500,000 shares in the Santa Monic-based video game publisher right after it lowered sales estimates.
Chief Executive Bobby Kotick spent $1.94 million to buy 150,000 shares on Dec. 19, the day after the company said sales and profit would fall below expectations.
The company had warned that sales of its key title, "Tony Hawk Pro Skater 4," were strong but that its other titles did not perform as well amid a fiercely competitive market and timid consumer spending. As a result, sales for the fiscal year ending March 31, 2003, probably will be $823 million, 12% lower than projections it made in October, the company said. It also expected profit to be 32% lower at 88 cents a share.
The announcement sent Activision shares down 19% that day to $12.71, a 22-month low.
After record growth in 2002, the video game industry has suffered in recent weeks as expectations for its prospects in 2003 dim. Few analysts believe that the industry can maintain double-digit growth, spurring a wave of downgrades in the shares of companies such as Activision and Calabasas-based THQ Inc.
Nonetheless, Kotick spent an additional $3.4 million on Dec. 23 to buy 250,000 Activision shares, boosting his ownership to 1.27 million shares, or nearly 2% of the company's shares outstanding, according to Securities and Exchange Commission filings.
Bill Chardavoyne, Activision's chief financial officer, spent $62,955 for 5,000 shares on Dec. 19. Ron Doornink, its president and chief operating officer, paid $322,594 for 25,000 shares on Dec. 19 and 20.
And Michael Rowe, executive vice president of human resources, spent $40,560 for 3,000 shares.
In addition, company co-Chairman Brian G. Kelly purchased 100,000 shares on Dec. 23 for $1.35 million.
None were available for comment.
Activision shares rose 30 cents to $14.59 Tuesday on Nasdaq.