Ubisoft, the French video game publisher best known for some of the world’s most popular video game franchises, including Prince of Persia, Far Cry, and Assassin’s Creed, should go private or be sold to a strategic investor, according to an open letter that Slovakia-based private equity firm AJ Investments shared today, one that explains how Ubisoft, while being a “great” and “undervalued” company, is currently being “mismanaged” by its founders, the Guillemot family, with Tencent, a major investor, taking advantage of things. Shares of Ubisoft plunged further today as a result of the hedge fund and minority investor’s advice, falling to a low of 13.31, according to the latest stock charts.
AJ Investments writes:
- “TAKE UBISOFT PRIVATE OR ALLOW IT TO SELL IT TO STRATEGIC INVESTOR.”
- “…we believe that Ubisoft at current valuation is deeply undervalued and should be worth between 40-45 EUR per share.”
- “The main reason why the valuation is so low compared to the peers is that Ubisoft at current state is mismanaged and shareholders are hostages of Guillemot family members and Tencent who take advantage of them.”
- “Management is focused on pleasing investors with beating quarterly results and not focusing on long-term strategy to provide exceptional experience for the gamers.”
- “We cannot understand the decision-making process of current management that is focused on releasing multiple average games per year that are harming Ubisoft’s reputation among gamers community instead of focusing to provide hit games within its exceptional franchise portfolio.”
- “Division Heartland which was very much expected game from the gamers was cancelled. Skull and Bones release was not a success, Prince of Persia Lost Crown was okay but not very impressive as nobody talks about the game anymore. Rainbow Siege is doing great, nevertheless franchises such Rayman, Splinter Cell, For Honor, Watch Dogs are sleeping for years despite these games are loved by millions of players all around the world.”
- “Latest release of Star Wars Outlaws is expected to bring good numbers, but recent reviews shows that game was not 100% ready to release…”
Trends that suggest Ubisoft and Tencent are purposely discounting the value of the company for full control, per AJ Investments:
About AJ Investments:
AJ Investments is a private equity firm that focuses on areas of business opportunity. Our strategy consists of an active approach to investments in order to identify and solve problems in the management of companies that negatively affect their performance. We select investment opportunities with high growth potential and focus on the quality and dynamics of these investments.
At a time when many companies choose a conservative approach and avoid risky investments, we, on the contrary, see these situations as unique opportunities for investment. We take advantage of events and take such steps that will help correct and optimize the running of companies. Our proactive approaches enable us to bring about positive change and increase the value of investments for our clients.