Ubisoft Being Pressured To Go Private As Share Prices Continue To Fall

As a seasoned gamer and long-term investor in the gaming industry, I can’t help but feel a sense of déjà vu when reading about Ubisoft‘s current situation. The company, once a titan in the gaming world, seems to be struggling under the weight of mismanagement and shareholder discontent, much like certain beloved characters in some of their own games.

Investors are urging Ubisoft to go private due to their struggling stock performance on the London Stock Exchange, with share prices continuing to decline.

Just over a week ago, Ubisoft’s stocks plummeted to a decade-low following the release of Star Wars Outlaws, prompting one shareholder to call for the company to go private. This move has caused the stocks to drop even lower, reaching €13.66 by the end of trading on Monday.

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In a publicly disclosed correspondence, AJ Investments expresses their belief that video game developer Ubisoft is currently underestimated in value and could potentially be worth between €40-€45 per share. The investment firm also voices apprehensions about Ubisoft’s future direction and the competence of its existing leadership.

The current situation at Ubisoft is being mishandled, with Guillemot family members and Tencent seemingly exploiting the shareholders. The management is preoccupied with meeting quarterly investor expectations rather than developing a long-term strategy that prioritizes an exceptional gaming experience for customers. We, as knowledgeable investors in the gaming industry, have been long-time shareholders of Activision Blizzard and recently acquired a position at Ubisoft, which we are continuing to increase.

The company proposes a plan for the company to transition into privately held status, with Tencent playing a substantial role as partner and shareholder. Furthermore, they aim to enact a broad cost-cutting strategy and adjust staffing to align more closely with the staffing models of leading industry counterparts.

They acknowledge that this process may necessitate challenging choices, but it’s crucial for maintaining longevity and staying competitive over time. They also bring up the fact that Ubisoft has had layoffs in the past few years.

Personally speaking, the recommendation I’ve come across is to institute some management adjustments, such as bringing on a fresh CEO to succeed Yves Guillemot.

As a devoted fan and minor shareholder with less than 1%, according to the Wall Street Journal’s report, I’ve reached out to Ubisoft, but they haven’t responded yet to my letter or requests for comment.

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