Back in May of this year, Nintendo (NTDOY) announced plans to execute a 10-for-1 stock split on September 30 in an effort to make shares more affordable for investors, particularly those in Japan, along with a $429 million stock buyback. While NTDOY shareholders outside of Japan weren’t overtly affected by the 10-for-1 split, the latest 5-for-1 split executed by Nintendo ADR (American Depository Receipt) today is one that will have more of a noticeable impact on U.S. shareholders.
In fact, some Etrade users have woken up today to what looks like 80 percent of their investments in NTDOY missing, though this isn’t the case. Given this is ADR stock, Etrade has seemingly yet to receive shares to distribute to NTDOY shareholders. That said, according to Etrade, the situation could take as long as a week to fix in terms of things showing up properly. Following today's stock split, Nintendo (NTDOY) shares were up around 4 percent.
Interestingly, at the beginning of the year, NTDOY shares represented 1/8 of the company’s 7974 shares. However, after the 10-for-1 stock split for Japanese shareholders, that representative number has since changed. Yesterday, a single NTDOY share represented 10/8 of a 7974 share. After today’s split, things have shifted once more, with one NTDOY share now representing 2/8 (or 1/4) of one 7974 share.
In May, the reason Nintendo gave for its 10-for-1 stock split was reducing the minimum investment price “thereby increasing the liquidity” of the company’s shares, along with expanding Nintendo’s investor base. These reasons are likely the same in terms of why Nintendo ADR is executing a 5-for-1 stock split.
The aforementioned missing, but also not missing, shares situation isn’t entirely uncommon either. Back in August, GameStop (GME) issued a statement following European investors claiming to have not received their three additional shares following the company’s 4-1 stock split. For more on this, be sure to read through our previous coverage of GameStop issuing a statement on missing European split dividend shares, and the initial announcement from Nintendo (7974) regarding the 10-for-1 stock split and $429 million stock buyback.