Atari shareholders upset over upheaval

Investor groups suggest publisher's majority shareholder Infogrames could be intentionally driving down stock price.

Infogrames appointed four independent directors to the governing board of its Atari publishing subsidiary today, but not before a group of Atari investors used the mass dismissal of directors from earlier this month as an opportunity to voice their ongoing displeasure with management.

In a Securities and Exchange Commission filing last Friday, Atari investor Coghill Capital Management vented its frustrations over the company's direction. The investment group said Atari had entered into distribution agreements that unfairly favored Infogrames and paid then-CEO Bruno Bonnell from its own coffers for work that should have been charged to Infogrames.

"Now, with the unilateral removal of the independent directors, Infogrames has denied Atari of the only possible checks and balances on its 'favorable' arrangements with Atari," the group wrote on Friday. "These acts on the part of Infogrames indicate an intent to drive down Atari's stock price even lower with the prospect of buying out Atari's public shareholders 'on the cheap.'"

The group demanded that the board reform with a majority of independent directors (which it did today), reestablish an independent audit committee, seek compensation from Infogrames and Atari management for damages caused to the company and shareholders, and "put an end to the sweetheart agreements with Infogrames."

An Atari representative had not returned a request for comment as of press time.

16 Comments

  • goron_tunic

    Posted Oct 17, 2007 3:04 pm PT

    atari are stil going?

  • jknight5422

    Posted Oct 17, 2007 6:18 am PT

    I'm lost. I have no idea what all this means. Guess we'll just have to wait & see what this shakedown does for them, if anything.

  • Titanfan2083

    Posted Oct 16, 2007 3:50 pm PT

    I like the colbert picture on the news part lol

  • ekisom

    Posted Oct 16, 2007 1:00 am PT

    infograms and atari are both grab azz companies trying to fool us all with their former glory. what they are doing is extremely damaging to the industry, consumers, and i.p's that they own. i was extremely disapointed with they're recent releases. considering that i was very optimistic about those titles prior to their release dates

  • Nintendo_Man

    Posted Oct 15, 2007 10:13 pm PT

    Nintendo should be watching and get them if the price keeps going down (they will transform the company into a much better one).

  • StillWingless

    Posted Oct 15, 2007 9:38 pm PT

    Raeldor:

    I don't think this could be connected to insider trading at this point. Insider trading involves the knowledge of information that hasn't gone public yet; it usually involves buying up extra shares while a price is low due to knowledge of an event that will drive share prices upward (not as common), or if someone is selling off the shares they already have because they know of a business practice or pending decision that will kill the stock price (think Enron, when the execs were cooking the books).

    Infogrames might be acting with the intent to kill Atari's stock price--I hear that they're close to being kicked off the NASDAQ--but that doesn't mean that they're using any inside information. In truth, it doesn't benefit Infogrames in any monetary way. Even if something crazy happened (I won't come up with an example, because it would be too convoluted) that resulted in Infogrames' eventual profit, it wouldn't be insider trading unless they were acting on a secret that they weren't supposed to know, and only if it happened as a direct result of Atari's stock price falling.

    Business is weird.

  • ZOnikJJ

    Posted Oct 15, 2007 5:54 pm PT

    hehe, shoulda invested in Nintendo.

  • DonutTrooper

    Posted Oct 15, 2007 4:58 pm PT

    Honestly, they shouldn't be mad that this happened. They should be mad they haven't sold their stocks at this point.

  • Ryir554

    Posted Oct 15, 2007 4:38 pm PT

    hehehe, Stephen Colbert

  • naboob1

    Posted Oct 15, 2007 3:43 pm PT

    loved the Colbert reference

  • tealmantis793

    Posted Oct 15, 2007 3:32 pm PT

    Ahhh... how the mighty have fallen....

  • Raeldor

    Posted Oct 15, 2007 3:31 pm PT

    If Infogrames buy out Atari on the cheap I wonder if that would show up as insider trading? If it does, it could be worth monitoring!

  • ivan_the_one

    Posted Oct 15, 2007 3:26 pm PT

    tip of the hat....wag of the finger....

  • darkchaostitan

    Posted Oct 15, 2007 3:19 pm PT

    The developer wars are beginning to take place, this just turns the tides

  • ColdfireTrilogy

    Posted Oct 15, 2007 3:07 pm PT

    ya this is unfortunate Atari was doing great for a while, then they hit hard ground again and sold much of their stock to Infogram .... apparently not as smart of a choice as they thought ...

  • lamprey263

    Posted Oct 15, 2007 3:03 pm PT

    something is rotten in the state of Atariland

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