Shares of video game maker Ubisoft (UBSFY) are up 34% on media reports that the company has received a buyout offer and might be taken private.
Several media reports state that Chinese technology giant Tencent and the Guillemot family that founded Ubisoft are preparing a buyout of the company and want to take it private. The move comes after Ubisoft has struggled financially and lost more than half its market value this year.
Neither Tencent or the Guillemot family have commented publicly on the media reports. However, there has been growing pressure on Ubisoft by activist investors in recent months. Tencent, which owns 10% of Ubisoft, is one of China’s largest technology firms and a leading video game developer.
Financial Problems at Ubisoft
At the end of September, Ubisoft postponed the release of its tentpole video game “Assassin’s Creed Shadows” by three months to February 2025. Another recent video game title called “Star Wars Outlaws” has posted weak sales since it launched in August of this year.
Ubisoft also recently lowered its net bookings guidance for its current fiscal year to around 1.95 billion euros (US$2.14 billion), which is well below the 2.32 billion euros Ubisoft reported in its previous fiscal year.
Is Ubisoft Stock a Buy?
No analysts have a position on Ubisoft Entertainment, so instead, we turn to the last five days in trading. For the most part, trading was flat over that period. Prior to October 4, Ubisoft stock had declined 70% this year.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
