Ubisoft, the victim of a dizzying fall in the stock market. We explain why
Games News Ubisoft, the victim of a dizzying fall in the stock market. We explain why
What happened at Ubisoft? The French issuer had its fourth straight decline on the Paris stock exchange and lost 12.30% over the last 5 days. On Monday, January 9, 2023, the company led by Yves Guillemot experienced its biggest drop at SBF 120. In one year, the price of the company to which we owe the Assassin’s Creed series has fallen like a Rabbid on a banana skin. . What is there to understand in this visible and enduring market distrust?
Summary
- In the middle of turbulence
- Fear of an unattainable forecast, but not only
In the middle of turbulence
Does the Ubisoft logo’s sparkling spiral turn into a purple swirl? It’s been a few weeks since the French video game giant’s action losses with repeated declines. Since January 1 of this year, the title has opened with a drop of over 9%, at the time of writing these lines. Although specialist explain Ubisoft withdrawal on January 9th by profit warning from British developer Frontier (F1 Manager 2022, Jurassic World Evolution 2), the crash in Ubisoft’s share price isn’t just from the last few days.
In one year, Yves Guillemot’s corporate action has melted by 44.15%, a very red figure compared to other market players – and the French brand’s direct competitors – namely Take Two (- 26.50% over a year), Electronic Arts ( – 3.67% for one year), and Activision (+ 22.36% for one year, especially thanks to the takeover proposal from Microsoft). As of January 2021, Ubisoft’s price exceeds 80 euros. Today, the action of the French publisher is trading around 24 euros on the Paris Stock Exchangea drop of almost 70%…the lowest level for almost 7 years.
In September 2022, it was during this period of undervaluation that had begun that Tencent decided to strengthen its ties with the French group by investing 300 million euros in the company (including 200 million in securities acquisitions). The Chinese giant, which is already a shareholder in the company behind Rayman, thus owns 49.9% of Guillemot Brothers, Ubisoft’s main shareholder, and has vowed not to interfere with the board’s decisions. However, not necessarily Tencent – the world’s largest issuer – saw this new price drop well, it was he who bought his shares at 80 euros to support the company in which he has invested. .
Fear of an unattainable forecast, but not only
The downward slope followed by the Ubisoft section has several explanations. The drastic decline observed since September 2022, which coincided with Tencent’s investment announcement, is explained by market disappointment expecting a takeover bid than further assistance from the Chinese giant. It’s worth bearing in mind that Ubisoft has seen its price jump by more than 20% in just two days following the modest rumors of a possible takeover. Then, the French publisher blew hot and cold for 2022, with announcement of the postponement of Skull and Bones and Avatar: Frontiers of Pandora, but also the promise of developing many new Assassin’s Creed projects, the group’s locomotive license. Despite the poor results during the first half of the 22-23 financial year, Ubisoft confirmed its annual goal with a set (non-IFRS) operating result of 400 million euros. On January 5, Bank of America revised its reduction target for Ubisoft’s stock, believing that the company’s forecast was too ambitious..
The mysterious license agreement that the brand brandished while presenting the delay of Avatar: Frontiers of Pandora reassured investors for a while, but faith eventually waned. Threat a profit warning, as it rocked Frontier, is gearing up ahead of results for the third quarter of the 22-23 fiscal year. Additionally, these results will indicate whether Just Dance 2023 and Mario + The Rabbids Sparks of Hope perform as the Guillemots had hoped. GameIndustry has clarified that the strategy game featuring Mario and Rabbit has unfortunately had a lesser start in the UK than the first episode released in 2017. Finally, still eliminating the gray area that still covers 2023, especially on all matters relating to the release schedule, the status of Prince of Persia and Splinter Cell Remake, what’s really behind the various Assassin’s Creed announcements, and the quality level of Skull & Bones (scheduled for March 9, 2023). An extensive program.
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