Ubisoft faces investor pressure to go private and restructure

Ubisoft saw its shares tumble after a call from a minority investor, AJ Investments, urged the company to go private. AJ Investments, a Slovakia-based hedge fund with a stake of less than 1% in Ubisoft, expressed dissatisfaction with the company’s current performance and strategic direction. The investor believes that a drastic change is needed, including replacing the management team and potentially considering a sale.

The gaming giant has faced a series of challenges in recent months, which has put increasing pressure on its stock. In July, Ubisoft announced delays for two of its upcoming mobile titles, “Rainbow Six Mobile” and “The Division Resurgence,” pushing their release dates beyond the current fiscal year ending March 2025. The delay, attributed to developers needing more time to meet player expectations, adds to a growing list of setbacks for the company. Earlier, Ubisoft also halted the development of “The Division Heartland,” shifting resources toward larger upcoming projects like “XDefiant.”

These challenges have had a severe impact on Ubisoft’s financial performance, with its stock price dropping more than 50% over the past year. On Monday, Ubisoft’s shares closed down by 7.1% in Paris, further reflecting investor uncertainty about the company’s future.

AJ Investments, led by founder and CEO Juraj Krupa, issued a letter to Ubisoft’s management, emphasizing the need for a significant overhaul. The hedge fund suggested the company should explore going private and advocated for the Guillemot family, which founded Ubisoft in 1986, to not stand in the way of a sale process. Krupa also suggested that new leadership might be needed to consider restructuring the company, potentially through studio sales or cost-cutting measures like layoffs.

While Ubisoft did not immediately comment on the letter, it’s clear that the company is facing mounting pressure from both investors and the broader gaming market. The Guillemot family currently holds a significant 13% stake in Ubisoft, and although they previously resisted takeover attempts—including one from French media giant Vivendi—the current situation may prompt a reassessment of their strategy.

In 2022, Ubisoft managed to remain independent amid a wave of industry consolidation, with major deals like Microsoft’s acquisition of Activision Blizzard and Sony’s purchase of Bungie. At the time, CEO Yves Guillemot expressed confidence in Ubisoft’s ability to maintain its independence, citing its strong portfolio and financial stability. However, with recent struggles and a decline in share value, Ubisoft may now find itself at a crossroads, with investors and analysts closely watching how the company will respond to calls for change.