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Nintendo (7974) announces $429 million buyback & 10-for-1 stock split

Nintendo announced full year 2022 earnings results today, but the company also announced a $429 million share buyback.

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Nintendo is out with their full year 2022 financial results, and the company beat their own guidance for the year. Nintendo also made two announcements of interest for shareholders. The company will execute a 10-for-1 stock split on Friday, September 30, 2022. If that wasn't enough wild news for shareholders, Nintendo also announced they will be buying $429 million worth of the company's stock at 8:45 a.m. tomorrow. Talk about playing with power.

Here's a breakdown of the share buyback.

  1. Reason for Acquisition
    • To improve capital efficiency as a flexible capital policy in accordance with the changes in business environment.
  2. Method of Acquisition
    • The Company will instruct its agent to purchase treasury shares at 8:45 a.m. on May 11, 2022, at the closing price of 56,360 yen as of today, May 10, 2022. 
  3. Details of Acquisition
    1. Class of shares to be acquired: common shares
    2. Number of shares to be acquired: Up to 1,000,000 shares (0.85% of the total number of shares outstanding excluding treasury shares)
    3. Total amount of acquisition: Up to 56,360,000,000 yen
    4. Announcement of results of acquisition: To be announced after the time designated for transactions at 8:45 a.m. on May 11, 2022

Nintendo also provided some more details on the upcoming stock split with another press release:

Nintendo provided a breakdown of their 10-for-1 stock split alongside their earnings results today.
Nintendo provided a breakdown of their 10-for-1 stock split alongside their earnings results today.

When fully executed, Nintendo will buy back nearly 1% of the outstanding shares of the company. The 10-for-1 stock split is set to be completed on September 30, 2022. NTDOY shareholders may not be directly affected by the split, but the shares in Japan will benefit greatly from the increased liquidity. Nintendo's Japanese stock 7974 will have over 1 billion shares outstanding and will be trading at a much more reasonable share price when compared to today's close of 56,360 yen/share.


Header image courtesy of Nintega-Dario on DeviantArt.

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.

Full Disclosure:

At the time of this article, Shacknews primary shareholder Asif A. Khan, his family members, or his company Virtue LLC had the following positions:

Long Nintendo via NTDOY shares

Luminary

Asif Khan is the Luminary and majority shareholder of Shacknews. He began his career in video game journalism as a freelancer in 2001 for Tendobox.com. Asif is a CPA and was formerly an investment adviser representative. After much success in his own personal investments, he retired from his day job in financial services and is currently focused on new private investments. His favorite PC game of all time is Duke Nukem 3D, and he is an unapologetic fan of most things Nintendo. Asif first frequented the Shack when it was sCary's Shugashack to find all things Quake. When he is not immersed in investments or gaming he is a purveyor of fine electronic music. Asif also has an irrational love of Cleveland sports.

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