Ubisoft’s Stock Was in a Freefall Until This Unexpected News Changed Everything (Shares Soar 30%)

Ubisoft–the studio that’s basically Assassin’s Creed, Far Cry, and a never-ending stream of delays in disguise–is back in the news, and for once, it’s not because they delayed another release to 2025. Nope, this time, Ubisoft’s stock pulled a total 180. After nose diving more than 40% this year, shares shot up over 30% on Friday. The reason? Whispers that Tencent, China’s tech overlord, and the Guillemots (aka Ubisoft’s founding fam) might swoop in for a buyout. Bigly moves, people.

(Source: Giphy) 

Apparently, Tencent and the Guillemots are tag-teaming this one, huddling up with financial advisors to stop Ubisoft from flat-out imploding. And here’s the kicker: they might take the company private. Yup, like hitting Ctrl+Alt+Delete on Ubisoft’s public existence. 

(Source: Bloomberg News) 

Which isn’t necessarily shocking considering, Ubisoft hasn’t been exactly killing it lately. Between delayed games, underwhelming releases, and a whole lot of shoulder shrugs from gamers, it’s been rough. Case in point: Ubisoft just delayed Assassin’s Creed Shadows by three months because apparently, their shiny Star Wars Outlaws game failed to get anyone’s lightsaber up. Oof. 

(Source: Killer Startups) 

But, but, but… with that said, Ubisoft ain’t the only gamer stock taking L’s this year. The entire gaming industry’s been on a slow-motion bender since the pandemic sugar-high of 2020-2021 wore off. Gamers are clinging to old titles like their lives depend on it, and new releases are collecting digital dust. Combine that with some pretty pathetic revenue numbers, and it’s no mystery why Ubisoft’s been stuck in a losing streak.

(Source: HR Forecast) 

Now the Guillemots (which sounds like a family straight out of a Les Miserable French mafia movie famous for torturing poor souls in the catacombs), who started Ubisoft back in the ‘80s and still own a cool 15% of it - most likely see this  Tencent team-up as their golden ticket to reclaim some control. Remember, they’ve been through the wringer before—Vivendi tried a hostile takeover back in 2018, and it wasn’t cute by any means. 

(Source: Giphy) 

Meaning, partnering with Tencent could be their way of slipping out of the harsh spotlight of the public eye. That is, if AJ Investments an activist investor and "Elliott Management" wannabe doesn’t f**k the whole thing up. For instance, these guys currently own less than 1% and have been making a LOT of noise.

In short, they’ve reportedly rallied up to 10% of Ubisoft’s shareholders to demand some serious changes. Their wishlist? Don’t take the company private, just friggin sell it all together to private equity or, you guessed it, Tencent. Especially considering these guys aren’t exactly thrilled with Ubisoft’s current management. 

(Source: Reuters) 

Now on the other hand, let’s talk about Tencent for a sec. ICYMI, this definitely isn’t their first spin in the gaming world; they already own about 10% of Ubisoft and their portfolio is stacked with hits like Honor of Kings. And given Tencent’s been throwing cash around like it’s Monopoly money, gobbling up gaming companies left, right, and twice on Sunday - Ubisoft not only fits nicely into its massive tool belt of games… but it’ll add nicely to their grander scheme to becoming a global gaming juggernaut.

(Source: Morning Star) 

However, even though all sides (Guillemots, Tencent, and AJ Investments) are all following somewhat of the same line of thinking regarding Ubisoft - the finalization of going private or even selling the company all together won’t exactly be a walk in the park. 

If you recall, there’s a ton of red tape whenever a Chinese company tries to snatch up Western assets, especially in today’s “hey, watch out for China” regulatory environment. But, when you throw in how much it'll take to pull this off…

(Source: Giphy) 

This hurdle becomes a massive elephant in the room. You see, even with Ubisoft’s stock in the dumpster, taking it private won’t come cheap. And since Tencent’s involved, you better believe this deal is going to attract some major regulatory side-eye. So while the idea of a Tencent-Guillemot dream team sounds cool, the reality might feel more like trying to complete a Dark Souls speedrun… blindfolded.

(Source: Giphy) 

Additionally, there are some investors who aren’t exactly buying the idea that a few internal tweaks are going to turn Ubisoft into a goldmine. The gaming industry is moving at breakneck speed, and Ubisoft’s been stuck in a loading screen for far too long. It’s gonna take more than a couple of executive shuffles to get this ship back on course.

In fact, Ubisoft’s CEO, Yves Guillemot, knows this, and he’s not just sitting around collecting paychecks either—he’s got the exec team under review to try and “further improve execution.” Translation: "We need to stop screwing the pooch here." 

(Source: Giphy) 

In the end though, the big takeaway is that buyout  rumors have given Ubisoft’s shareholders something to hang onto—Friday’s stock surge is proof of that. But with the talks still in the “maybe, kinda, sorta” phase and a whole lot of obstacles ahead, it’s anyone’s guess how this fiasco will play out. 

In the meantime, let’s all just pray this doesn’t turn into a horrific Paramount blockbuster spin-off (that would be atrocious), and as always stay safe and stay frosty, friends! Until next time…

P.S. Another winner! Friday morning's surprise alert ended the day with a nice 53% gain! Click here to upgrade to premium to make sure you don’t miss out on the next one. 

Stocks.News holds no positions in companies mentioned in the article.