🔥Early Access: Land A High Paying Web3 Job In 90 Days LEARN MORE

Ubisoft shareholders express dissatisfaction in an open letter

In this post:

  • Minority shareholders of Ubisoft Entertainment through AJ Investments and its partners wrote a letter to express dissatisfaction with the company’s performance. 
  • The shareholders believe that Ubisoft’s management under Yves Guillemot is unsatisfactory, suggesting leadership change.
  • The shareholders suggested further strategic and structural changes to ensure long-term satisfaction for gamers globally.

An open letter addressed to Ubisoft Entertainment’s Board of Directors, Members of Committees, and other shareholders expressed “deep dissatisfaction” with the company’s current performance. Juraj Kurpa, a minority shareholder, wrote the letter on September 9 through AJ Investments and its partners. 

Kurpa referred to Ubisoft’s recent quarterly results, which postponed the release of several games, including The Division and Rainbow Six Siege, to 2025. The shareholder highlighted how the postponements lowered the company’s revenue outlook for its second quarter. Kurpa also explained that the results made him question the gaming company’s ability to deliver long-term value to its investors.

The minority shareholder addressed the plunging value of Ubisoft’s shares, totaling approximately 40% over the past year. The shareholder compared the company’s value to the rising share values of Ubisoft’s competitors. The shareholder suggested strategic and structural changes to ensure the company’s long-term viability to shareholders and gamers. 

Shareholders believe Ubisoft is undervalued

Kurpa mentioned the company’s success as a gaming company developing, distributing, and selling major game titles in the industry, including Assassin’s Creed, Far Cry, Tommy Clancy’s, Just Dance, Crew, and Rayman. The shareholders expressed the company’s ability to attract millions of gamers in the long term.

In the open letter, Ubisoft’s shareholders expressed concern about Ubisoft Entertainment’s undervaluation compared to its competitors. The minority shareholder attributed the company’s undervaluation to mismanagement by the Guillemot family and Tencent Holdings. 

“However, we believe that Ubisoft at current valuation is deeply undervalued and should be worth between 40-45 EUR per share.”

– Juraj Kurpa, Minority shareholder of Ubisoft Entertainment

Kurpa cited different indicators, including the company’s Book Value per share, EV/Sales, and EV/EBITDA, compared to other gaming companies, such as Take-Two Interactive, Roblox, Playtika, Embracer, and Electronic Arts. The shareholders’ open letter also cited Take-Two and Electronic Arts’s EV/EBITDA data for next year at 15x and 13x, respectively. Ubisoft Entertainment’s EV/EBITDA stands at 2.9x for next year. 

See also  The Sandbox Alpha Season 4 week 1 has begun, here's what players should know

Deutsche Bank’s analysis also reportedly highlighted the company’s current valuation of a 4.0x EV/EBITDA at a 67% discount compared to its competitors. The analysis suggested that investors should reward efforts toward redeveloping critical IPs and address major cost inefficiencies before the financial year 2025.

Kurpa suggests that Ubisoft goes private

AJ Investments and its partners suggested that the gaming company go private in their proposal to increase the gaming company’s value to its investors. The shareholders explained that it was time for the company to offer long-term satisfaction to gamers instead of focusing on pleasing investors.

Kurpa noted Ubisoft’s experience in the gaming industry, further mentioning the company’s long-standing relationship with Activision Blizzard. 

The shareholders believe that a change in the management will help propel the company in the right direction. The shareholders also suggested that instead of Ubisoft’s current focus on releasing multiple titles a year, there should be a greater focus on developing hit games that gain appeal in the gaming community.

See also  Ubisoft debuts in Web 3 gaming with Champions Tactics: Grimoria Chronicles

The minority shareholder proposed starting the hiring process for a new CEO to replace Yves Guillemot. The minority shareholders also plan to begin a proxy fight and sale process using French minority law.

Share link:

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

Most read

Loading Most Read articles...

Stay on top of crypto news, get daily updates in your inbox

Related News

Cryptopolitan
Subscribe to CryptoPolitan