Ubisoft is going through a rough patch. Betweenplummeting stock prices and mediocre game releases, the French developers can’t catch a break. It’s going to get a whole lot worse as some of itsinvestors are demandinga company restructuring.
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Juraj Krupa, founder ofUbisoft’s minority owner AJ Investments, sent anopen letter to stakeholders, criticizing management and demanding change.
In the letter, Krupa said that Ubisoftis undervalued and has the potential to be priced at $44 - $49 a share.He listed game delays, block of acquisitions, and adeteriorating reputation,among other reasons, as why changes must happen.
Krupa’s letter centers on an alleged collaboration between Ubisoft’s founders, the Guillemot family, and the Chinese conglomerateTencent.
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To this end, Krupa demanded that Ubisoft be taken private, implement “Cost Reduction and Staff Optimization,” focus oncore IPsand, crucially, a change in management.
It’s important to note that Krupa’s firm holds less than a %1 stake in Ubisoft. If his demands aren’t met, Krupa will “get together with other minority shareholders who share our views and make a bigger push against Ubisoft management.”
While it’s been common knowledge within the industry that theAssassin’s Creeddeveloperis bleeding money, only a few thought it had reached a breaking point already.
It’s unclear whether Ubisoft’s bigger investors will rally behind Krupa’s letter or he’ll have to bring together smaller ones himself.
Do I Smell A Coup At Ubisoft?
While Ubisoft is hemorrhaging, an alleged Guillemot-Tencentcoup is the chief concern of Krupa’s letter.
The Guillemot family originally founded Ubisoft and now holds about13% of the company’s shares—the most of all shareholders. Still, if Krupa is to be believed, the Guillemot family has colluded with Tencent to get even more.
Krupa alleges that whenTencent bought 49.9% of Guillemot BrothersLimited at $88 a share in 2022, it was only setting the stage for the Guillemots to buy it back for a measly $20 a share later. If his allegations are true, then Ubisoft’s recent blunders are more calculated than they might seem.
At the time of writing, no stakeholder, nor Ubisoft management, has replied to Krupa.
It’s unclear why Tencent would potentially help the Guillemots take full control of Ubisoft instead of appointing a new CEO, as Krupa suggested.
In a way, Krupa’s trying to pull of a coup before the Guillemots do. Not sure anyone had a coup-off in their Ubisoft 2024 bingo cards.
The Chinese giant has a long history of investing outside of its home country. With aportfolio of investmentsnumbering in billions in the gaming industry, their influence is impossible to ignore.
Still, we don’t know if their Ubisoft investment is just another in a massive portfolio, or an aiding hand in Guillemots' scheme.
