Nintendo is a household name that needs no introduction, and like many such names in the tech and gaming world, it’s one that’s seen heavy investment in public trading. This has come at a cost however, as whilst Nintendo’s stock price has risen, there’s been a reluctance for less wealthy traders to invest. This looks set to change as Nintendo has split their stock, reducing overall value buthopefully bringing in new investors.
Nintendo is not the first company in the broader tech field to split their stocks. However, the situation is unique for a number of reasons. For one, Nintendo does not trade on the major American stock exchanges like the NYSE (New York Stock Exchange) or Nasdaq. This effort seems aimed squarely at their main investors, that being those in Japan, where younger traders are increasingly prevalent in the financial sphere.
Stock splitting is a simple mechanic, whereby increasing the number of shares allows more people to buy at a lower price. Although this may seem like a bad deal for existing investors, it translates to more liquidity, meaning that those looking to sell will find more willing buyers, and those looking to hold will see more money flowing into the company. Although for those looking to invest, the fact that Nintendo only trades on the Tokyo and Osaka exchanges may prove to be a bit of a headache.
As mentioned above, Nintendo is also following other companies in the tech sphere such Apple, Amazon and Alphabet (Google). Nintendo stands as essentially the sole remaining player in traditional handheld gaming with the Switch.Its forays into the mobile sphere, although facing mixed reception, have been strong in many cases. Successes include Mario Kart tour, which recently reported $300m in revenue as of its third anniversary, and Fire Emblem: Heroes which joined the unicorn (mobile games making over a billion in revenue) club back in June when it reported more than $1b in revenue as of June.
There’s been some suggestion that this split may also be a vote of confidence, or precede some large-scale effort that could see significant buzz and thus further investment. With more shares available, there’ll certainly be an eye on what Nintendo does next which could move prospective investors to buy new stocks.