Ubisoft shares have declined again. On the afternoon of April 4, their value dropped to 8.86 euros per share, marking the worst result in nearly 12 years.
Assassin's Creed Shadows
The last time Ubisoft shares traded below this level was in May 2013. For comparison, just yesterday one of the company’s shares was priced at 10.8 euros, and a month ago it was 12.14 euros.
By the time this news was published, Ubisoft had partially recovered from the drop—its shares now stand at 9.61 euros each.
Ubisoft share dynamics
The current decline in Ubisoft's share price is linked to the market's reaction to the deal with Tencent. As a reminder, at the end of March, the company announced that with the support of the Chinese giant, it would establish a subsidiary that will own the franchises for Assassin’s Creed, Far Cry, and Tom Clancy’s Rainbow Six. As part of the deal, Tencent will purchase 25% of this subsidiary for 1.16 billion euros.
The deal was particularly negatively received by the investment fund AJ Investments, which owns 1% of Ubisoft's shares. On April 3, it, along with a group of minority investors, announced that it is filing a lawsuit against the French company. The plaintiffs demanded that Ubisoft renegotiate the agreement with Tencent towards a direct sale of assets for 4 billion euros, with 75% of the proceeds distributed to shareholders as dividends.
Ubisoft's shares began their sharp decline in January 2021. Since then, their value has plummeted by 88%.