Game News Ubisoft, victim of a vertiginous fall in the stock market. We explain why
What’s going on at Ubisoft? The French publisher suffered its fourth consecutive decline on the Paris stock exchange and lost 12.30% over the past 5 days. On Monday, January 9, 2023, the company led by Yves Guillemot was the biggest drop in 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 peel. . What is there to understand in this visible and lasting distrust of the market?
Summary
- In the midst of turbulence
- Fears of unattainable forecasts, but not only
In the midst of turbulence
Is the sparkling spiral of the Ubisoft logo turning into a purple swirl? It has been several weeks since the action of the French video game giant has been in the red with repetitive declines. Since January 1 of this year, the title has been unscrewing with a fall of more than 9%, at the time of writing these lines. Although specialists explain Ubisoft’s withdrawal of January 9 by the profit warning from the British developer Frontier (F1 Manager 2022, Jurassic World Evolution 2), the fall in Ubisoft’s share price is not just from recent days.
In one year, the action of the company of Yves Guillemot has melted by 44.15%, a figure in the bright red compared to those of other market players – and direct competitors of the French brand – that are Take Two (- 26.50% over one year), Electronic Arts (- 3.67% over one year), and Activision (+ 22.36% over one year, in particular thanks to the takeover proposal from Microsoft). In January 2021, Ubisoft’s price exceeded 80 euros. Today, the action of the French publisher is trading around 24 euros on the Paris Stock Exchangea drop of almost 70%… its lowest level for almost 7 years.
In September 2022, it was during this period of undervaluation that had already begun that Tencent decided to strengthen its ties with the French group by investing 300 million euros in the company (including 200 million in the acquisition of shares). The Chinese giant, already a shareholder in the firm behind Rayman, thus owns 49.9% of the shares of Guillemot Brothers, the main shareholder of Ubisoft, and promises not to interfere with the decisions of the board of directors. However, it is not certain that Tencent – the world’s largest publisher – sees this new drop in price favorably, he who bought his shares at the price of 80 euros in order to support the company in which he had already invested. .
Fears of unattainable forecasts, but not only
The downward slope followed by the Ubisoft share has several explanations. The drastic drop observed from September 2022, which coincides with the announcement of Tencent’s investment, is explained by the disappointment of the markets which were hoping for a takeover bid rather than further aid from the Chinese giant. It is worth remembering that Ubisoft had seen its price jump by more than 20% in just two days following simple rumors of a possible takeover. Then, the French publisher blew hot and cold during its year 2022, with the announcement of the postponements of Skull and Bones and Avatar: Frontiers of Pandora, but also the promise of development of many new Assassin’s Creed projects, the group’s locomotive license. Despite results in the red during the first half of its 22-23 financial year, Ubisoft confirmed its annual objectives with an operating result (non-IFRS) set at 400 million euros. On January 5, Bank of America revised its target for Ubisoft stock downwards, believing that the company’s forecasts were too ambitious..
The mysterious licensing agreement brandished by the brand when presenting the postponement of Avatar: Frontiers of Pandora reassured investors for a time, but confidence finally dissipated. The threat of a profit warning, like the one that is shaking Frontier, is settling in the run-up to the results for the third quarter of fiscal year 22-23. Additionally, these results will show whether Just Dance 2023 and Mario + The Rabbids Sparks of Hope performed as expected by Guillemots. GamesIndustry had clarified that the strategy game featuring Mario and the Rabbits had unfortunately had a less good start in the United Kingdom than the first episode released in 2017. Finally, it remains to remove the gray areas that still encompass the year 2023, especially on anything related to the release schedule, the status of the Prince of Persia and Splinter Cell Remakes, what’s really behind the multiple Assassin’s Creeds announced, and the quality level of Skull & Bones (scheduled for March 9, 2023). A vast program.
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