Shares of Embracer plummet 30% prior to the spin-off of Coffee Stain

The value of Embracer Group's shares plummeted by more than 30% as the date approached for spinning off Coffee Stain Group, scheduled for December 11. The stock had a closing value of SEK85.49 ($9.15) on December 5, prior to opening at SEK57.95 ($6.20) on December 8. Once the market opened, shareholders holding Embracer Class B shares were ineligible to receive shares in Coffee Stain Group upon its public listing. By the day's end, the shares were trading at SEK60.00 ($6.42), with the current value slightly higher at SEK60.33 ($6.45).

Coffee Stain is poised to begin trading on the Nasdaq First North Premier Growth Market in Stockholm on the 11th of December. Embracer Group initially disclosed plans back in May to establish Coffee Stain as a separate company by year's end.

Phil Rogers, CEO of Embracer, remarked on the strategic move during the firm's recent financial update, citing it as a pivotal step in refining their business scope. Rogers expressed confidence in Coffee Stain's prospects as an independent entity, citing their robust intellectual properties, engaged communities, and innovative talent.

The financial performance for Coffee Stain Group in the quarter ending on September 30, 2025, showed net sales reaching SEK224 million ($23.96 million), marking a 12% decline compared to the previous year. Earnings before interest and tax (EBIT) fell by 42%, settling at SEK44 million ($4.7 million).

Back in April 2024, a restructuring announcement by Embracer Group revealed plans to divide into three distinct sectors: Asmodee Group's focus shifted to board games, Coffee Stain was assigned indie and mid-range projects, and AAA games were to be the focus for Middle-earth Enterprises. This restructuring led to Coffee Stain Group's current branding, while Middle-earth Enterprises has now become Fellowship Entertainment.

The spinning off of Asmodee in February 2025 resulted in a 41.5% decrease in Embracer's stock value. Now, as Coffee Stain Group is set to be independently traded, Embracer plans to rebrand itself as Fellowship Entertainment.

These organizational changes come on the heels of challenging years for Embracer, following an unsuccessful bid to secure a $2 billion investment from Saudi Arabia's Savvy Games Group. The fallout included major layoffs, closure, and sale of numerous studios, and game project cancellations, culminating in the recent sale of Arc Games and Cryptic Studios.

The leadership transition saw Deputy CEO Phil Rogers take over the CEO role from co-founder Lars Wingefors earlier this year, while Wingefors continues as the executive chair of Embracer's board.