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A minority Ubisoft investor urges the company to overhaul leadership and consider privatization as stock plummets over 40% in a year amid recent poor game performance.
Juraj Krupa, founder of Slovakia-based AJ Investments and a minority Ubisoft investor, has expressed frustration with the company’s recent performance and strategic direction. In an open letter to Ubisoft’s board of directors, including CEO Yves Guillemot, and fellow investor Tencent, Krupa criticized management and raised concerns intensified by recent quarterly results.
Yesterday, AJ Investments releases open letter on @Ubisoft and its Board of Directors.
We believe that Ubisoft is exceptional company that is significantly undervalued due to the current performance and mismanagement despite great IPs such as Assassin Creed, Far Cry etc.
— Juraj Krupa (@JurajKrupa1) September 10, 2024
Krupa’s criticism comes after Ubisoft’s stock fell twice within two weeks. Following a 10% drop two days after Star Wars Outlaws launched, the stock fell an additional 7.1% to €13.67 on September 9th, with further declines anticipated. Krupa noted a more than 40% decline in stock over the past year, contrasting with competitors’ gains.
In his letter, Krupa suggested that Ubisoft consider going private to mitigate public market pressures or entertain a potential takeover. He believes that such a move could enhance the company’s prospects. Additionally, he proposed optimizing the workforce through further layoffs, focusing on core intellectual properties, and implementing management changes.
AJ Investments’ founder described Ubisoft as “a great company” that is “deeply undervalued” due to mismanagement by the Guillemot family and Tencent, which holds a 49.9% stake in Guillemot Bros., making it the largest shareholder. “Management is focused on pleasing investors with beating quarterly results and not focusing on long-term strategy to provide exceptional experience for the gamers,” he wrote in the letter.
Krupa is calling for a leadership overhaul, including the appointment of a new CEO, to streamline costs and restructure the studios for better agility and competitiveness. He claims that minority shareholders control about 70% of the company and believes there is sufficient voting power to challenge Guillemot’s leadership.
The Recent Layoffs and Decline in Ubisoft’s Stock
Following the August 30th launch of Star Wars Outlaws, Ubisoft’s shares fell to their lowest in nearly a decade, dropping over 10% to €15.34 per share and reducing its market cap to €1.97 billion. The game’s physical sales were 55% lower than Star Wars: Jedi Survivor, and it received mixed reviews. JP Morgan revised its sales forecast down by two million units, projecting 5.5 million copies sold by March 2025. The stock decline was also impacted by high development costs and challenges with Ubisoft’s free-to-play shooter XDefiant, which has seen declining player engagement.
In mid-August Ubisoft laid off 45 employees from its US studios Red Storm Entertainment and Ubisoft San Francisco as part of a broader workforce reduction strategy to align with evolving business goals. This follows previous cuts, totaling around 1,700 positions since 2022, amid a trend of cost-cutting across the gaming industry.
