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In a dramatic turn of events, Ubisoft, a leading player in the global gaming industry, is facing mounting pressure to transition into a private entity as its share prices plummet to record lows. Following the lackluster reception of their latest release, Star Wars Outlaws, Ubisoft’s shares nosedived to a concerning 10-year low, signaling potential instability within the company.
AJ Investments, a significant investor in the gaming sector, publicly advocated for Ubisoft to go private in a sharply worded letter released earlier this week. The investor argued that the company’s current market valuation, which hovered around €13.66 as of Monday’s market close, grossly underestimates its true potential and intrinsic value, suggesting a target share price between €40 and €45.
Criticizing the current management, AJ Investments accused the Guillemot family and Tencent—who hold substantial stakes in Ubisoft—of prioritizing short-term financial gains over long-term strategic planning and development necessary for sustaining competitive edge and enhancing gamer experiences. The investor expressed concerns over what they described as “mismanagement” and the need for a radical internal overhaul.
To rectify the situation, AJ Investments proposes a series of bold moves:
- Transitioning Ubisoft to private ownership, with Tencent playing a significant role as a partner and shareholder.
- Implementing a rigorous cost-cutting program to align staffing levels and operational expenses with industry standards.
- Instituting sweeping management changes, including the appointment of a new CEO to succeed Yves Guillemot.
Despite the gravity of these recommendations, Ubisoft has yet to formally respond to the investor’s letter or public queries regarding the proposed strategies. The gaming giant remains at a critical juncture, with its future direction hanging in the balance as stakeholders and industry watchers closely monitor the unfolding situation.
