Today I was hit again for the first time in a long time. Last time it was WireCard and before that SolarWorld. Today Ubisoft $UBI (-2,35%) ...
👉🏻 What happened?
As part of its ongoing restructuring, Ubisoft announced last night that it intends to reduce its fixed costs by a further 200 million a year. In order to achieve this, the company will be completely turned inside out in organizational terms. In addition, the company has decided to completely discontinue several developments and to postpone the remaining planned releases for this year until next year. This has naturally also led to a considerable downward adjustment of the forecast. A loss of around 1 billion is now expected for 2026, driven primarily by the one-off costs for the restructuring and around 300 million less revenue due to the postponements.
After Ubisoft had already squandered a lot of trust on the market in the past, this has now led to a complete collapse of the share price. In the end, the stock was down almost 40%... and unfortunately I was there!
👉🏻 Annoying but not so bad...
Ubisoft was a speculation for me right from the start. I only made my first investment at around 6.80 euros as far as I remember. I was aware from the beginning that Ubisoft is not a "quality stock" in the classic sense. But I was / am of the opinion that Ubisoft has every opportunity to get itself out of the hole, especially after the Chinese took over... I still think so, by the way, which is why I increased my stake today and my average equity now stands at 5.80 euros.
But that's not the point. Rather, I would like to use this example to point out once again how important it is to have an appropriate risk weighting. Even if you see potential in a speculation, you have to be prepared for it to go horribly wrong. In the best case scenario, the money is then blocked for years if you don't want to sell at a loss or it actually ends in a total loss.
In my case, my initial investment made up less than 1% (0.5%) of the total portfolio. As of today, I have increased the total investment to 1% of the portfolio total. Overall, the Ubisoft share price slide is "only" responsible for a total loss of 0.3% of the portfolio... and that is completely offset by other share price gains today. 😊
So once again my tip to everyone: always be aware of the risk and don't get greedy!
I've seen some portfolios here that put everything on just one or two risky bets. Sure, it can work out, but it only has to go wrong once and then you're there!
With this in mind, good luck with your investing! ... 🍀
... and that Ubisoft gets its act together! 😉