Nintendo (NTDOY) announces $900 million share buyback

Nintendo surprised and delighted shareholders with a share buyback. Find out all the info you need to know before NTDOY stock opens up in the US.


Hey hey hey, kiddos! It's your ole pal, Captain Business here with some late night news. Nintendo is out with their Q1 2022 financial results, and they have surprised some shareholders with a nearly $1 billion share buyback.

Here is the full statement directly from Nintendo's investor relations page.

Nintendo announced a nearly $1 billion share buyback today!
Nintendo announced a nearly $1 billion share buyback today!

Nintendo said the reason for the buyback is to, "Implement a flexible capital policy in accordance with changes in the business environment and provide shareholder returns as part of our shareholder return policy." It's hard not to think the company is sending a message to the market that they feel the stock is cheap. When you look at it relative to its competitors or other media companies, there is not much of a premium being given to Nintendo's track record and intellectual property with a trailing and forward P/E ratio in the teens.

Then again, Nintendo is facing a down year, and this quarter's results showed that. The company spoke to these tough year-over-year comparisons in their Q1 2022 earnings release: "Hardware and software sales in the first quarter of last fiscal year were substantially driven by the March 2020 release of Animal Crossing: New Horizons, so compared to then, hardware sales were down 21.7% and software sales were down 10.2% year-on-year."

As for the exact amount of the buyback, the company put some limits to the program. Nintendo (NTDOY) can buyback up to 1,800,000 shares (1.51% of the outstanding shares). They also capped the buyback to 100,000,000,000 yen, which is about $911 million at the time this article went live. Bow howdy, that's a lot of bananas!

With revenues and earnings facing down years, it is nice of Nintendo to reward shareholders with this unexpected buyback. The company will be buying the shares at market prices starting August 6, 2021 and ending September 15, 2021. The Switch did top 89 million units sold since launch, which still keeps it on pace to pass the Wii sometime during this fiscal year. We'll keep our eye on the Big N when the stock opens tomorrow in the good ole United Staes of America, but it is currently trading slightly up in Germany.

This article is only meant for educational purposes, and should not be taken as investment advice. Please consider your own investment time horizon, risk tolerance, and consult with a financial advisor before acting on this information.

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From The Chatty
  • reply
    August 5, 2021 12:25 AM

    Captain Business posted a new article, Nintendo (NTDOY) announces $900 million share buyback

    • reply
      August 5, 2021 4:06 AM

      Close to a billion dollars getting completely pissed away instead of investing in R&D or developing games.

      • reply
        August 5, 2021 4:14 AM

        You realize their R&D budget for this year alone is around that amount.

        • reply
          August 5, 2021 5:05 AM

          That’s no reason to just throw the money away in a buyback :

          • reply
            August 5, 2021 5:38 AM

            I remember that article. You’ll never hear me say that money won’t be better spent on salaries, problem with that article is it also makes irrelevant points with regards to companies like Amazon.

            Fact of the matter is that this is almost exactly like Apple’s buybacks where they have more money in their warchest than they can even spend on acquisitions, they’re already paying a healthy dividend (larger than AAPL’s in this case), and the stock is insanely cheap.

            Again, you’ll never hear me say that those wages shouldn’t go to workers, but this isn’t Amazon or Walmart we’re talking about either. Otherwise eh

        • reply
          August 5, 2021 5:16 AM

          Yeah but if they doubled that budget maybe they could have a console that was slightly faster than my 8 year old iPad.

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            August 5, 2021 5:33 AM

            Their R&D has very little bearing on what they purchase from Nvidia.

            Profit margins and current manufacturing bottlenecks have 100x more to do with their hardware than their R&D spend

      • reply
        August 5, 2021 5:21 AM

        Nintendo spend exactly what they want to spend on R&D and development.

      • reply
        August 5, 2021 11:18 AM

        If the company pays it self the dividends from it's shares, this could be a more sustainable way to invest in R&D or development. Though just at a slower,but longer term pace?

      • reply
        August 5, 2021 1:11 PM

        Ah, nothing like random people on the internet criticising the actions of one of the most successful game companies ever. It's like those people who say they should get out of the hardware market every cycle before they release hardware and make bajillions again.

    • reply
      August 5, 2021 4:14 AM

      "there is not much of a premium being given to Nintendo's track record and intellectual property with a trailing and forward P/E ratio in the teens."

      I have no idea what this means

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