Kacho
Gold Member
"Hey man you should come over. To hang out. I didn't mean I want to have sex with you lol."
Ubisoft reports first-half 2025-26 earnings figures and resumes trading
Cyberpunkd
Member
What does it mean "too undervalued"? The stock price reflects investors' sentiment, it's on Ubi to convince investors the company is in a better shape. Even if what they did is legal the investors are not buying it - the stock is almost to where it was yesterday after getting +4% bump today ; they are down -32% 6M ; -14.37% this past month.
I was thinking with moving some assets to a private subsidiary they will just tank the rest of the company, but it looks like Tencent footed the bill on that one, so I don't understand what purpose was there for doing it?
NickFire
Member
Maybe the loan is secured by the big assets specifically? Would the inability to pay back a needed loan give them the cover needed to justify moving the big assets to a new company?
I'm just throwing mud against the wall to try understanding this stuff. And one thing I don't get is how they could justify selling off the big franchises. How would traditional Ubi survive without them?
well they could have said that in some way
yurinka
Member
Means that it's a joke to value $1B (current Ubisoft's market cap, which is the valuation estimate of the company combining the value of all their stocks in the stock market) a company that makes around 2B€/year, has a lot of valuable IPs, around 40 studios, around 18K employees and pretty healthy in their finances (only had a big debt they are getting rid of and always were on position to pay it).
That undervaluation has been artificially created by certain butthurted big players who failed at trying to acquire Ubisoft and since they couldn't have been trying to hurt Ubisoft and kick the Guillemots to see if by doing so they were able to do so. But couldn't, and Tencent did help the Guillemots save their ass from hostile takeovers.
The artificial undervaluation in the stock market reached the point that a big investor like Tencent was embarassed to get a too big percentage of the company for their money and decided that it was more fair to do it by moving some assets to a private subsidiary and realistically value them.
With this format of grouping Ubisoft assets (mostly studios and IPs) into private Ubisoft 'creative houses' subsidiaries help Ubisoft get investments in specific portions of the company using a valuation and price estimated only by Ubisoft and these investors, avoiding the fake valuation of the stock market.
As side effect this helps to formally recognize the realistic value of what it is in this subsidiary, so in the whole Ubisoft too, which helps for easing future access to more debt when needed or getting a better valuation in the stock market. It is also makes easier to go private in the future.
Regarding how the new subsidiary affects to the daily work of Ubisoft and the teams inside or outside the subsidiary, it doesn't change anything: they are still Ubisoft assets, teams and IPs that pretty much work in the same way than before. Just with a bit more of autonomy.
I assume the Ubisoft/Guillemots plan is to split the Ubisoft assets in maybe 5 or 6 creative houses and to keep buying back Ubisoft stocks (so the lower the price is, the better for them) to the point they bought enough (90% or more of the stocks/votes) to be able to make Ubisoft private. Or to create another company that would be private as could be 'Uvisoft' and to sell there these 'creative house' subsidiaries simplifying and easing the process.
Having these creative houses operating 'autonomously' inside Ubisoft, it also eases that if some day Ubisoft wants or needs to sell or spin off one of these portions to somebody else it would be easier and faster to do, plus less traumatic for both sides.
Tney said it today but with technicalities.
As far as I understood it, back in July announced that Ubisoft was getting new auditors joining the wagon to help triple check that everything was ok, pretty likely as part of the process of creating the new subsidiary and selling a small portion of the subsidiary to Tencent.
These auditors found out in the last moment before posting the quarterly results that one unspecified partnership made in the previous fiscal year (I think it may be it could be that the Saudis funded the development of a AC Mirage free DLC set in Saudi Arabia, a pretty rare case) was accounted differently to how they thought it should, so required a few days of extra time to correct and compensate the mistake.
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yurinka
Member
As I remember the deal signed last time Tencent invested in Ubisoft itself (not in this new subsidiary, not giving the Guillemots money to help them buy more Ubi stocks) was that Tencent wasn't able to buy more Ubisofts stocks at all during 5 years, and that the Guillemots weren't able to sell Ubi stocks to anyone (including Tencent) in 8 years.
They went from over 20K to 17K in 3 years to reduce costs (reduced in 1500 people in the last year), which with a few extra remaining reduction in the 2nd half of this FY, will mean a cost reduction at the end of this fiscal year of at least 200M€/year.
They already are ahead of schedule and already above their initial cost saving objective.
Instead of doing it abruptly with a big mass layoff, they are doing it spread across several years and mostly via early retirement plans, incentivated voluntary leaving plans, less temporary workers renewed, favoring to allow people moving from an internal team to another instead over hiring people from outside, being a bit more strict/demanding in yearly personal appraisals, replacing less people who retires/leaves/gets fired/moves to other internal studio and with a few smaller and targeted firings.
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Because they had to. They still grew their debt overall. They sold company shares every quarter. They have to pay another €250 millions of debt in the incoming months... Without that Tencent cash injection, they would be in deep shit.
yurinka
Member
Ubisoft always had cash and equivalents to pay their obligations like short term debt and everything else, they never have been at risk of insolvency. They also had tons of assets they could use to sell if desired to get more cash.
But it's true that the debt is/was a too big for their size and that would be better to do something to get extra cash to get rid of it. So they decide to get investment for the same amount of money of the debt doing the formula of selling 25% of the new subsidiary to Tencent, which allows them to get money while Ubisoft continues having full control over their assets.
Having get rid of the debt (I assume won't pay all of it now, but instead they'll keep the cash there to keep paying it when needed), their next and less priority target will be to further optimize their profitability by further reducing costs (they have an active plan for it) or increaing their revenue sources.
So pretty likely after having completed the investment on Vantage Studios they'll move forward to create additional Ubisoft Creative Houses subsidiaries and also get minority (or even in some case, maybe even majority) investors for some 'creative house' subsidiary, as could be Tencent or other ones like Sony, MS, the saudis, etc, which will give them extra money while also helping Ubisoft get a closer relationship with some of they key strategical parters (mainly Tecent, Sony and Nintendo).
Doing so they'd get extra money, which I assume having the debt solved, they may use it to buy back Ubisoft stocks until once they buy enough stocks (90% of the stocks or votes) they'll turn the company private.
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TheInfamousKira
Reseterror Resettler
Data doesn't change or suddenly become more positive the more it's analyzed (much less with like an extra business week of delayed reporting)
The numbers were as good or bad as they were going to be, whether they were printed a month ago or a month from now. My take? Likely spent that extra time trying to PR massage the figures into more charming groups.
Wouldn't be at all surprised to see some "optimistic manipulation of specific figures,"
The numbers were as good or bad as they were going to be, whether they were printed a month ago or a month from now. My take? Likely spent that extra time trying to PR massage the figures into more charming groups.
Wouldn't be at all surprised to see some "optimistic manipulation of specific figures,"
