Threads
- The decline in Ubisoft’s stock price has shaken investor confidence in Ubisoft’s future.
- A minority shareholder, AJ Investments, is pushing Ubisoft to go private, believing its shares are undervalued.
- The shareholder suggests a cost-cutting plan and advises replacing the company’s CEO, Yves Guillemot.
Ubisoft is under growing pressure from a major minority shareholder to go private because its stock price has dropped significantly. This push comes as Ubisoft deals with several problems, including disappointing game releases and a general decrease in investor trust.
The company’s stock fell to a 10-year low after its new game, Star Wars Outlaws, was poorly received. This has led to a drop in investor confidence, with Ubisoft’s shares closing at €13.67 on Monday.
Why it matters: Ubisoft’s Star Wars game didn’t meet expectations, resulting in lower sales. This disappointment has shaken investor confidence, making the idea of going private more attractive to some shareholders.
The company’s problems are due to various issues, such as disappointing sales, and worries about management and strategy. Ongoing troubles, especially with major titles like Skull and Bones and Star Wars Outlaws, have worsened things.
In light of these circumstances, AJ Investments, a hedge fund that is increasing its ownership of Ubisoft, has publicly advised the company to go private.
The investor believes Ubisoft’s shares are currently undervalued and should be worth between €40 and €45 each. In a letter to Ubisoft’s management, AJ Investments voiced worries about the company’s future and criticized its current leaders.
The hedge fund claims Ubisoft’s leaders are too focused on short-term profits, neglecting long-term planning. The investor argues that this focus harms both shareholders and the quality of the gaming experience Ubisoft provides.
Along with calling for Ubisoft to go private, AJ Investments has suggested a detailed cost-cutting plan to match industry standards. The hedge fund recommends that Ubisoft streamline its staff, noting that the company has already made layoffs in recent years.
The investor has also called for replacing Yves Guillemot, Ubisoft’s CEO, with new leadership to help steer the company towards a more stable future.
Ubisoft has not yet officially responded to the idea of going private. However, the Guillemot family, which owns a large share of the company, will be key in deciding what happens next.
While the Guillemots have traditionally resisted selling or making big changes, the current situation might lead them to rethink their position.
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