Nintendo has had an interesting 2021 from a financial standpoint, but the company did announce a share repurchase buyback program with their most recent earnings release. In a press release posted to their investor relations page, Nintendo has detailed just how many shares they have purchased. Between August 6-31, 2021 the company spent over $650 million at market prices.
Please take a look at the entire Notification of Status of Acquisition of Treasury Shares on Nintendo's investor relations page, but here are the highlights.
Nintendo has acquired 1,377,700 shares for 71,954,969,000 yen ($652,656,753). They bought the shares during regular trading hours for market prices. The Board of Directors authorized a buyback up to 1,800,000 shares up to 100,000,000,000 yen ($906,630,600). So as of the time of this article, Nintendo can buy 422,300 shares up with a remaining 28,045,031,000 yen ($254,257,653) available for the purchases. The company has faced some very tough year-over-year comparisons and the buyback seems to have put a temporary floor in place as the shares are down from their all-time high set in December 2020.
Many investors and analysts have shown concern about a potential slowdown at Nintendo over the past few months, and that is a fair criticism given the Switch console is starting to show its age as it approaches its fifth anniversary next March. Now share buybacks are not always a good use of capital, but Nintendo might be sending shareholders a message with this purchase. They wouldn't be buying it if they didn't think it was a good deal. On many fundamental metrics, including their price-to-earnings ratio, Nintendo (NTDOY) is being given a lower premium than many other players in the video game and technology industries.
With many investors throwing in the towel on the Big N this year after Switch OLED was announced instead of the much-anticipated Switch Pro, Nintendo themselves may be trying to send a message with this buyback. They might also just be trying to stop the bleeding ahead of the launch of Steam Deck. Only time will tell, but no one knows what's in the pipeline better than Nintendo's Board of Directors, and they are still buying shares.
Do you own Nintendo's stock? Do you think they make dumb baby games and are about to get owned by Valve's Steam Deck? Are you sick of the stock market bubble? Let us know in the comments section below. We really want to hear your opinion.
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.
At the time of this article, Shacknews primary shareholder Asif A. Khan, his family members, and his company Virtue LLC had the following positions:
Long Nintendo via NTDOY shares
Captain Business posted a new article, Nintendo (NTDOY) bought back $652 million of their stock in August
Great. Please go up again. It has made my portfolio very sad.
My long term decision on whether or not to hold will be based in large part on the mario movie. That’s a decent new revenue stream for them if it can take off. I guess there’s still a lot of market for consoles in non-first world countries but with China clamping down in gaming…ooof.