2024

Value

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.&nbsp;
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.&nbsp;
<h3 id="span-style-font-weight-400-shareholders-believe-ubisoft-is-undervalued-span">Shareholders believe Ubisoft is undervalued</h3>
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.&nbsp;
<blockquote>
 “However, we believe that Ubisoft at current valuation is deeply undervalued and should be worth between 40-45 EUR per share.”
 <a href="https://aj-invest.com/wp-content/uploads/2024/09/Ubisoft-Open-Letter.pdf" rel="noopener noreferrer nofollow" target="_blank">– Juraj Kurpa</a>, Minority shareholder of Ubisoft Entertainment
</blockquote>
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.&nbsp;
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.
<h3 id="span-style-font-weight-400-kurpa-suggests-that-ubisoft-goes-private-span">Kurpa suggests that Ubisoft goes private</h3>
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">
 The Ubisoft situation has gotten FAR worse.
 Not only has their share price taken an EPIC NOSEDIVE in the past couple of days, but NOW, their own investors are beginning to PANIC.
 AJ Investments is DEMANDING in an open letter to Ubisoft's CEO that the company goes private,… <a href="https://t.co/OM1HQf7nUr" rel="noopener noreferrer nofollow" target="_blank">pic.twitter.com/OM1HQf7nUr</a>
 — Dreadroberts (@SicklyTheNinJa) <a href="https://twitter.com/SicklyTheNinJa/status/1833217366148202999?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow" target="_blank">September 9, 2024</a>
</blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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.&nbsp;
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.
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.

Ubisoft shareholders express dissatisfaction in an open letter

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