EA Sells All Shares of Ubisoft and Loses $57 Million in the Process
EA sells it's 15% stake in Ubisoft. One has to wonder why EA bought the shares to begin with. Ubisoft was founded by the five Guillemot brothers and their controlling stake was 7.2% of the shares. At 15% EA had a considerable number of shares of which I am sure Ubisoft considered hostile. One way to look at it is this, if you had a business, why would you invest in someone else's company? Ideally, you would invest in your own company to grow and make more money.
While this itself is news, I wonder if EA needs cash for operations. They bought the controlling stake in 2005 and by my math, shares where selling for $11.00, when I check out the price of the shares today, they are selling for $6.95. EA lost a lot of money on this deal.
Let's see, there are 94.3 Million Ubisoft shares that are outstanding. 15% of the shares would be about 14.2 Million Shares. 14.2 Million shares at $11.00 would be about $155 Million. Calculated at today's price of $6.95, it is about $98 million. The difference between $155 Million and $98 Million is about $57 Million.
Wow, I would be very upset if I were a shareholder of EA.
More can be read here at Bloomberg http://www.businessweek.com/news/201...s-ubisoft.html