It’s been a volatile year for Ubisoft, and it doesn’t look like things will be stable anytime soon. The publisher has delayed its half-year earnings report, originally to release Thursday evening. They’ve also requested Euronext, the operator of several European stock exchanges, to pause the trading of Ubisoft stocks and bonds starting Friday. Chief Financial Officer Frederick Duget has issued an internal memo to staff addressing the situation, urging employees not to speculate on the delay.
What Does the Memo Say?
Duget’s message to Ubisoft staff is, unsurprisingly, slim on details. He clarifies the half-year earnings report is to come out in the next few days, and asks employees to refrain from rumors and speculation.
“Due to legal regulations, we cannot share more information with you at this time. To limit unnecessary speculation and market volatility during this short delay, we have asked Euronext to suspend the trading of our stock until the results are announced. We know this is likely to raise questions and drive media coverage. I encourage you all to listen to the conference call – which will be available via the Investor section of our site — just after the results are released so that you have a more detailed view of our earnings.“
With the report’s delay running into the weekend, it’s possible that we won’t know its contents until Monday, the 17th. Insider Gaming sent a request for comment to Ubisoft, but so far the company has remained silent.
More Trouble at Ubisoft?
So why the delay? There are a few different reasons an earnings report might be delayed. None of them are good, just varying levels of bad.
There’s the possibility that the delay is for innocuous reasons. Either the workload of compiling the report was too much, crucial data was late, etc. While these aren’t necessarily signs of missed financial goals, it does signal a level of internal mismanagement that could make investors wary. But on the other hand, a delayed report can signal critical financial targets were missed. The extra time to publish may allow the company to frame its results in a better light, or to establish a plan of action to address to shortfall. As Forbes reports, there’s an inverse relationship between financial goals and the publishing of earnings reports. In short, the earlier results come in, the better they are. Conversely, the longer results are delayed, the more likely there’s bad news on the horizon.
Ubisoft’s request to pause trading of bonds and stocks doesn’t bode well either. Typically, when earnings reports are delayed for extended periods, it often leads to sell-offs. With Ubisoft stock approaching its historic low, the pause request may be the company’s attempt to minimize further damage to its value. But the pause won’t last forever. If earnings goals are missed, the sell-off will happen regardless.
Whatever the truth is, it’s not looking good for Ubisoft. Is it likely the company will go bankrupt? Maybe, maybe not. But with their stock on a downward trend since 2020, it’s going to get worse before it gets worse.
Sourced from Insider Gaming and Reuters. For more coverage, check back regularly with our Other Games section.
