Game news Ubisoft, victim of a dramatic stock market crash. We explain why
What’s happening at Ubisoft? The French publisher suffered a fourth consecutive fall on the Paris Stock Exchange and lost 12.30% in the last 5 days. On Monday, January 9, 2023, the company led by Yves Guillemot recorded the largest drop in SBF 120. In one year, the price of the company to which we owe the Assassin’s Creed series fell like a rabbit on a banana peel. . What is there to understand in this visible and lasting distrust of the market?
- In the midst of the turbulence
- Fears of unrealizable forecasts, but not only
In the midst of the turbulence
Is the glittering spiral of the Ubisoft logo turning into a purple swirl? It’s been several weeks since the French gaming giant’s stock went into the red with repeated declines. Since January 1 of this year the stock has been unscrewing with a decline of more than 9%, at the time of writing these lines. Although specialists explain Ubisoft’s January 9 withdrawal by the profit notice from British developer Frontier (F1 2022 manager, The Evolution of the Jurassic World 2), the drop in Ubisoft’s share price doesn’t just date back to the last few days.
In one year, the share of Yves Guillemot’s company is dissolved by 44.15%, a figure in bright red compared to those of other market players – and direct competitors of the French brand – which 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 Microsoft’s takeover proposal). In January 2021, Ubisoft’s price exceeded 80 euros. Today, the French publisher’s share is traded at around 24 euros on the Paris stock exchangea drop of nearly 70%…its lowest level in nearly 7 years.
In September 2022, it was during this period of underestimation that had already begun that Tencent decided to strengthen its ties with the French group by investing 300 million euros in the company (of which 200 million in the purchase of securities). The Chinese giant is already a shareholder of the company behind it 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 largest publisher in the world – welcomes this new drop in quotation, 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 unrealizable forecasts, but not only
The descent followed by the Ubisoft title has several explanations. The drastic drop observed since September 2022, which coincides with the announcement of Tencent’s investment, can be explained by the disappointment of the markets who were hoping for a takeover bid rather than more help from the Chinese giant. It is worth mentioning that Ubisoft had seen his leap of course by more than 20% in just two days following simple rumors of a possible takeover. Then, the French publisher has been blowing hot and cold in its 2022 year, with the announcement of the referrals of Skull and bones and’Avatar: Pandora’s Frontiersbut also the promise of development of many new Assassin’s Creed projects, group locomotive licence. Despite results in the red in the first half of its 22-23 financial year, Ubisoft confirmed its full-year targets with an operating profit (non-IFRS) set at €400m. On Jan. 5, Bank of America revised down its target for Ubisoft stock, believing the company’s forecasts were too ambitious..
The mysterious licensing deal brandished at the presentation of the postponement of Avatar: Frontiers of Pandora reassured investors for a while, but eventually the confidence dissipated. The threat of A profit notice, like the one shaking Frontier, is settling ahead of its fiscal 22-23 third-quarter results. Furthermore, these results will reveal if Just dance 2023 And Mario + Rabbids Sparks of Hope performed up to Guillemot’s expectations. Gaming industry had clarified that the strategy game starring Mario and the Rabbits had unfortunately had a less good start in the UK than the first episode released in 2017. Finally, it remains to remove the gray areas that still span the year 2023especially on everything related to the release schedule, the progress of the remakes of prince of Persia and of Splinter Cell makeover, what’s really behind the announced multiples of Assassin’s Creed and the level of quality of Skull & Bones (expected March 9, 2023). An extensive programme.