Activision's stock prices tumbled more than 14 percent this morning on news that members of its management had sold 7.1 million of their shares Wednesday. According to an industry analyst's memo, Activision reported to the Securities and Exchange Commission that chairman and CEO Bobby Kotick had sold 2.55 million shares, or 26 percent of his holdings; president Ron Doornink had sold 1.1 million shares, or 40 percent of his holdings; and cochairman and director Brian Kelly had sold 2.5 million shares, or 34 percent of his holdings. Other Activision employess joined the above three in the sell-off of privately held shares.

　　According to the regulatory filing, Activision insiders sold the stock to take advantage of a brief trading window, and the move does not "reflect any individual or collective judgment about the company's prospects." Wedbush Morgan Security analyst Michael Pachter reported that, in a separate SEC filing, the game publisher said the shares were purchased by a financial institution after the market closed on February 9.

　　Activision's prospects seemed bright this week after it announced banner third-quarter earnings and bright forecasts on Monday. This morning, its shares were trading just under $20.50, down from a high of $24.95 earlier in the week. But analysts remained optimistic. Pachter said Wedbush Morgan maintains its "buy" rating for Activision and its stock-price target of $29. Shawn Milne, an analyst with Friedman Billings Ramsey, said, "We are maintaining our 'outperform' rating and $28 price target."

　　Pachter mentioned industry rumors that Activision might soon be acquired by a major media company, adding that it seems less likely now. "We think that the sale of a substantial number of insider shares makes an acquisition of Activision less likely, as most investors will assume that company management would not be selling shares if a sale of the company were imminent."

　　Activision reported that this is the first time a chair or cochair has sold stock since May of 2002.