Square Enix Stock Falls 6% After Denying Privatization Rumors on September 2

Square Enix Holdings (9684.T) fell 6% to ¥2,972 on September 2 after the company firmly denied privatization rumors that had sparked a 7% rally the previous day. The gaming giant stated it has made no announcement about going private and is not considering such a move, directly contradicting a report in Japanese magazine Sentaku that claimed foreign investment funds were interested in taking the company private.

What triggered the stock surge and reversal

On September 1, Sentaku magazine reported that foreign investment funds had shown interest in taking Square Enix private. The rumor caused the stock to jump as high as ¥3,294 intraday, a gain of 11%, before closing at ¥3,161, up 6.97%. Investors bought on speculation that a privatization deal would include a premium payout to existing shareholders. The next day, after the company’s denial, the stock reversed sharply, closing at ¥2,972, down 5.98% from the previous close.

Why the denial matters for activist investors

The privatization rumor gained traction because activist fund 3D Investment Partners holds approximately 18.5% of Square Enix and has been pushing for changes. The fund previously criticized the company’s “Reboots” strategy and presented a 100-page presentation to other shareholders in December 2025. However, Square Enix’s statement made clear the company has no plans to go private and is not in talks with any buyout firms.

Meyka data shows mixed signals on valuation

Meyka grades Square Enix a B+ with a Buy recommendation, citing strong fundamentals. The stock trades at a PE ratio of 28.15 with an RSI of 71.45, indicating overbought conditions. The 12-month price forecast stands at ¥3,688.52, suggesting 24% upside from current levels. However, the company’s three-year forecast of ¥2,551.32 reflects uncertainty about long-term growth, and the stock remains down 11.1% over the past year despite recent gains.

Context from other gaming companies going private

The privatization speculation reflects broader trends in the gaming industry. Electronic Arts was recently acquired by a consortium including Saudi Arabia’s Public Investment Fund and became private. Devolver Digital, which went public in 2021, has seen its stock decline and reportedly proposed delisting to investors. These moves highlight investor frustration with public gaming companies’ stock performance relative to their intellectual property value.

Final Thoughts

Square Enix’s denial ends the privatization speculation, but the stock’s volatility shows how sensitive markets are to structural changes at major gaming firms. With Meyka grading the stock B+ and the 12-month forecast at ¥3,688.52, investors should focus on execution of the company’s strategy rather than M&A rumors.

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The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.