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Shareholders Call for CEO's Resignation Following 'Frat Boy' Report

Activision has said that it is standing behind CEO Bobby Kotick.
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Shares of Activision Blizzard  (ATVI) - Get Activision Blizzard, Inc. Report fell Wednesday after a shareholder group called on CEO Bobby Kotick to resign a day after a report about the company's "frat boy" culture.

The shareholder's letter also called for the resignation of Brian Kelly, Activision's board chairman, saying that he should announce his retirement no later than the end of the year. 

The group said it wanted "the board of directors to take responsibility for failing to recognize and address what the California Department of Fair Employment and Housing has described as a 'frat boy' workplace culture to flourish." 

The group that sent the letter own a total of 4.8 million shares, about 2% of the company's outstanding shares, according to Fortune

The news service reports that it could cost as much as $265 million for the company to terminate Kotick without cause. 

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Activision shares closed the day down 2.93%.

The stock is suffering the fallout from a Wall Street Journal report Tuesday about the company's "frat boy" culture and the role CEO Bobby Kotick and the video game studio's board played in fostering that environment.

The Journal article alleges that Kotick knew about instances of sexual assault that he did not disclose to the board of directors. 

The company's board responded to the Journal article by saying "the Board remains confident that appropriately addressed workplace issues brought to his attention."

The board didn't seem inclined to pressure Kotick, who has been CEO of the company since 1991. The year before, Kotick and Kelly purchased a 25% stake in the video game maker, which was struggling at the time.