Report: SEC investigating Activision Blizzard investors for insider trading

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The Securities and Exchange Commission is investigating three investors for alleged massive insider trading just ahead of Microsoft's January announcement of merger plans with Activision Blizzard, according to a Wall Street Journal report.

Film and music executive David Geffen, broadcasting executive Barry Diller, and Diller's stepson Alexander von Furstenberg collectively spent over $108 million to buy $40/share call options of Activision Blizzard stock on January 14, according to the report. On January 18, when the Microsoft merger plans were announced, those shares rose 26 percent to $82.31, representing an unrealized gain of about $60 million for the three investors. The value of those options could increase further if the merger goes through at Microsoft's proposed per-share price of $95.

"It was simply a lucky bet," Diller told the Journal. "We acted on no information of any kind from anyone. It is one of those coincidences."

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