CD Projekt - Stock Exchange Supervision Investigates

It seems the Polish stock exchange supervision is not amused about the way CD Projekt communicated The Witcher 3's sales success, because their share price suddenly jumped 26%. If they really forgot to make a correct investors filing before releasing infos to the press, they could be in for an expensive lesson.

Big Gaming posted a detailed article, PCGames.de has a chart.

More information.

I thought the CD Project RED was a private owned company? And as such didn't need to file information to the Polish stock exchange….

Unfortunately, CDPR hasn't been around long enough to plant politicians and buy folks in the financial sector, so I'm sure the full weight and measure of the law will apply to them.

I'd like the Polish stock exchange to produce evidence of their value before they attempt to use the rules to rob CDPR

Because our financial systems and economic future are in grave peril from the machinations of the RPG makers.

Manipulating stock prices is serious business. Not saying that's what they did but there are reasons that disclosure rules exist. I doubt they'll get hit too hard unless there was some suspect buying before hand or selling afterwards, though I'm not overly familiar with the polish regulators

Originally Posted by aries100
I thought the CD Project RED was a private owned company? And as such didn't need to file information to the Polish stock exchange….

Nope. They've been a publicly traded stock company since the reverse takeover thing with Optimus back in 2009. Here it is straight from Wikipedia…

On October 1, 2009, a nearly defunct Optimus signed a letter of intent with CDP Investment Sp. z o.o., a holding company for CD Projekt. In what is known as reverse takeover, Optimus agreed to buy 100% stake in CDP Investment, funding the transaction with its own shares and allowing CD Projekt to enter the Warsaw Stock Exchange. The transaction was completed on January 3, 2011, and on July 25, 2011 Optimus S.A. changed its name to CD Projekt RED S.A.

Originally Posted by blatantninja
Manipulating stock prices is serious business. Not saying that's what they did but there are reasons that disclosure rules exist. I doubt they'll get hit too hard unless there was some suspect buying before hand or selling afterwards, though I'm not overly familiar with the polish regulators

Yeah, but let's not kid ourselves that the banks and markets aren't full of crooks and epic corruption. I just find it a bit rich when the little guys are held to the highest standards, and thrown under the bus.

little guys? Didn't we just read they spent millions and millions on W3? I don't see little guy here, these guys are as big as anyone; well anyone European.

You think that a few tens of millions of investment puts them up with the big boys of the corporate and financial world?

Originally Posted by Ripper
Yeah, but let's not kid ourselves that the banks and markets aren't full of crooks and epic corruption. I just find it a bit rich when the little guys are held to the highest standards, and thrown under the bus.

I work in compliance and risk. There are a lot of scumbags in the industry, but believe me stuff like this hits big and small alike. Just look at what happened to SAC capital

Originally Posted by Ripper
You think that a few tens of millions of investment puts them up with the big boys of the corporate and financial world?

Goodness no! Just puts them up with the big boys of the crpg world I'd say they're the largest European publisher/development house. That makes them a target.

Hopefully CD Projekt won't get stung too hard if they do get hit with a fine. At this point it's still under investigation, so I guess all we can do now is wait and see where things go. It would be terrible if this has any serious ramifications on the company.

Well this won't be CD Projekt's first legal battle. As I remember when the developer was sued by a publisher, and offered a settlement to end the lawsuit a few years back.

Link - http://www.gamespot.com/articles/nam…/1100-6347307/

Well, if they posted a letter with sales data before it was public, and without issuing a press release to the investors site at the same time, they could be in for a fine I guess… hopefully not too much though.

While rules rarely apply to the big boys - as they pay their way around such trivialities - I think it's only proper that CDPR, as small potatoes, experience a consequence for breaking them.

Originally Posted by crpgnut
little guys? Didn't we just read they spent millions and millions on W3? I don't see little guy here, these guys are as big as anyone; well anyone European.

Till the moment they have enough $ to buy EA, they'll still be a small fish.

On the topic, if they screwed up, they'll pay. And will be careful next time.
Or someone else will pay and they'll put a special thanks to them in credits. Maybe they already did.
No need for fuss.

Well, when HSBC was caught laundering money for drug cartels, terrorists and rogue states, as well as enabling mass tax avoidance, they were fined roughly one month's profits, and no one was jailed. I just hope that the penalty for CDPR's infraction will be proportionate to that, regarding their size and the relative gravity of their offence. Let's say a 50€ fine, and half an hour on the naughty step.

Originally Posted by Kaspian
Hopefully CD Projekt won't get stung too hard if they do get hit with a fine. At this point it's still under investigation, so I guess all we can do now is wait and see where things go. It would be terrible if this has any serious ramifications on the company.

Unless there was any type of intentional misconduct (IE tipping people off so they could make money when the stock jumped), likely they'll just get a slap on the wrist, maybe a small fine. They'd have to find evidence of executed trades intentionally done based on the way the information was released for them to get serious trouble.

Originally Posted by Ripper
Well, when HSBC was caught laundering money for drug cartels, terrorists and rogue states, as well as enabling mass tax avoidance, they were fined roughly one month's profits, and no one was jailed. I just hope that the penalty for CDPR's infraction will be proportionate to that, regarding their size and the relative gravity of their offence. Let's say a 50€ fine, and half an hour on the naughty step.

If they get fined, and assuming that it was indeed unintentional and no one intentionally profited off of it, I would expect a fine anywhere from 10,000Euro to maybe 250,000Euro. Likely on the lower end (though again, I'm not experienced with the Polish regulators).

One of the problems with punishing big companies like HSBC is that 1) if you nail them as badly as they deserve, financially speaking, you potentially put hundreds of thousands of regular every day workers out of work (the whole too big to fail) and 2) its extremely hard to pin point a person or persons in an organization that large that both had intimate knowledge of what was going on and were responsible for oking it.

There's a real case to be made for not allowing banks to grow beyond a certain size. In the US, interstate banks used to be banned. That went away in the late 70's and the massive consolidations began. The theory was that the cap on domestic deposits (no company may have more than 10% of demand deposits in the total US market post merger) combined with the Glass-Steagle prohibition on combinations of I-banks, consumer banks and insurance companies would prevent firms from ever becoming so big as to be problematic just on their size.

Well, we still have the 10% cap, but Glass-Steagle went the way of the Dodo, and banks (here's looking at you Bank of America) have found very creative ways around the 10% cap.