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Switch news doesn't translate favorably for Nintendo's stock price

Shares down more than 5 percent on both the Tokyo and New York exchanges.

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Nintendo's massive unveiling of details for the Switch late last week did not sit well with investors, with the stock taking a hit of more than 5 percent on both the Tokyo and New York stock exchanges soon after the reveal.

By Friday morning, Nintendo had dropped more than 5.75 percent to 23,750 yen, down from a high of 25,085 yen earlier in the day, on volume (7.589 million shares traded) more than three times the previous day. By today, the stock had stabilized somewhat, but still dropped as low as 22,905 yen before rebounding slightly as the day progressed.

In New York on Friday, Nintendo shares dropped almost 6.5 percent from a Thursday close of $27.60 to $25.85 by the closing bell. The U.S. market is closed today for the MLK holiday.

While news of the console received generally favorable press, analysts seemed a bit put off by the rather high $299.99 price tag and no bundled games. There is also some concern as to whether the console-handheld hybrid would appeal to a broad audience. Our own resident stock expert, Asif "Man With The Briefcase" Khan, thinks both investors and fans are suffering from "post-traumatic Wii U Disorder," where that console's failure is still fresh in everyone's minds. That makes dismissing the Switch relatively easy. The "sell first, ask questions later mentality" makes a knee-jerk response to the stock almost normal at this point, he said.

The Nintendo Switch is scheduled to launch on March 3, and we will obviously know more when we can start seeing actual sales numbers, but right now, Nintendo is again stumbling through a hardware reveal that pales in comparison to current gen competitors PlayStation 4 and Xbox One. 

 

Contributing Editor

From The Chatty

  • reply
    January 16, 2017 9:23 AM

    John Keefer posted a new article, Switch news doesn't translate favorably for Nintendo's stock price

    • reply
      January 16, 2017 9:52 AM

      Hahahah

    • reply
      January 16, 2017 10:39 AM

      Ruh roh

    • reply
      January 16, 2017 10:48 AM

      Isn't that how it always goes after an anticipated hardware reveal? Apple drops after every iPhone announcement.

      • reply
        January 16, 2017 10:52 AM

        Pretty much. I used to short apple stock on a regular basis. Hit all but one.

        • reply
          January 16, 2017 10:58 AM

          oh man, haha. the reason this post cracked me up is not just bcs I did the same thing, but bcs I got so confident in this that I broke my golden rule of mainstream stock trading: involving friends/family. I never do it. I flat out refuse. It's too risky and I'm not smart enough to risk other peoples' money.

          Except this was so open and obvious and repeatable that I finally let up. And of course I was wrong. And of course the next time it went back to par.

          stocks ¯\_(ツ)_/¯

      • reply
        January 16, 2017 11:35 AM

        Buy on the rumor, sell on the news

      • reply
        January 16, 2017 11:39 AM

        It depends. Apple's recent reveals have all been preceded by extremely accurate rumors. Then they are only going to be responding to any surprises.

        The Switch rumor reporting was a mixed bag. A lot of it was right. But one major thing was wrong. The prevailing rumor leading up to the presentation was that the console was going to be priced at $249. When the actual price was announced, they were dead (at least from a temporary stock price since).

    • reply
      January 16, 2017 10:51 AM

      It's worth noting that the stock keeps getting propped at 25 since mid dec, so this is probably a safe time to buy if you have faith in nintendo. I don't really have faith in nintendo, but I do think briefcase nailed his risk assessment. The potential losses @ 25 are really acceptable risk.

    • reply
      January 16, 2017 10:54 AM

      It's almost comical how much stock prices swing up and down sometimes. It really makes investors seem like temperamental children sometimes. Huge swings for sometimes small announcements, sometimes the reasoning is based on false information (not researched). It just seems like kind of a joke. Especially with Nintendo it's been swinging so much in either direction, it's starting to lose its meaning.

      • reply
        January 16, 2017 10:56 AM

        The stock market is not really investing, it's trading.

      • reply
        January 16, 2017 11:00 AM

        gotta remember people are buying and selling for all sorts of diff reasons and timelines, so on and so forth. very often - and in fact, almost certainly with - competing interests.

      • reply
        January 16, 2017 11:38 AM

        90% of trades are done by high frequency trading algorithms. This has increased volatility in the last decade.

        • reply
          January 16, 2017 12:27 PM

          You know. If you made a new video series called 'I'm a complete noob dumbass at this stock shit, how to I get started?' I would watch the hell out of it. I've always been interested, but its scary.

    • reply
      January 16, 2017 11:38 AM

      Better make some more Pokemon shit!