Submitted by lmcontaldi 205d ago | news

Nintendo Buying Up to $1.2 Billion of Their Own Shares

Nintendo, following their Q3 financial reports, intends to buy back 10 million of their own shares. As a publicly traded company, the investors are looking to nearly double the amount in Nintendo's treasury from about 13 million shares to 23 million. This deal is slated to happen by March 31st according to their Notification of Acquisition. According to current yen to US ratio, this buy back would settle more than $1.2 billion in stock. (3DS, Industry, Nintendo, Wii U)

Becuzisaid  +   205d ago
Can't wait for the headline "Nintendo fires Iwata".
thorstein  +   205d ago
Followed by "Nintendo Plans to Release New Console by 2016"
#1.1 (Edited 205d ago ) | Agree(7) | Disagree(10) | Report | Reply
uptownsoul  +   205d ago
Followed EXTREMELY closely by Super Mario Bros
-Foxtrot  +   205d ago
...and Metroid, Starfox, Earthbound, Luigis Mansion 2 (an actual console sequel) and maybe F Zero.

I'd cry if they released a new Earthbound game
#1.1.2 (Edited 205d ago ) | Agree(5) | Disagree(5) | Report
TomShoe  +   205d ago
Followed by "Super Mario Bros: The Movie 2 announced" :P
JoGam  +   205d ago
Followed by 20 Tens reasons Nintendo next console will fail articles per day on N4G. Smh
thorstein  +   205d ago
Followed by "Super Smash Bros. vs Marvel"
PSNintyGamer  +   205d ago
Only to replace with someone exactly like him.
-Foxtrot  +   205d ago
Like what Square Enix has done....never thought of that. It's kind of a risk isn't it.
JoGam  +   205d ago
#1.3 (Edited 205d ago ) | Agree(0) | Disagree(1) | Report | Reply
Ausbo  +   205d ago
nintendo should just do what they do best. That is making great first party games. I know its kinda sick to say this, but they should just be a third party developer and release on other consoles.

I grew up on nintendo games, and their consoles, but nintendo is failing. They don't support third parties, they have lost the casual and their consoles don't compare to their competitors. I LOVE NINTENDO, but they need to change to survive.
DC777  +   205d ago
Especially before someone buys them out with all this wacko go on smartphones and other platforms obsession going around.

Good move regardless. IBM has been keeping it's value up for years doing this type of stuff.
cleft5  +   205d ago
This seems like a move on Nintendo's part to consolidate their power so that they aren't beholden to ignorant investors that think only of profit with no long term outlook.

Wouldn't it be interesting if Iwata gave an inflated, unrealistic report of how many WiiUs they would sell to lower the stock price, knowing it would return to normal but put investors in a state where they would be eager to sell stock. I don't know, that seems a little extreme, but wow if it was true what an insanely brilliant move on their part it would be.
DC777  +   205d ago
It could be true I would suppose it would go well with their silence on release dates for most of the bigger games coming this year. Time will tell.
lmcontaldi  +   205d ago
Anyone here good with finance and want to give me a run down on what exactly is happening?

Is this something to do with Yamauchi's inheritance or is this a savvy power play?
theEx1Le  +   205d ago
Essentially it keeps the companies value up, as there is less shares to trade. However it may also be a power play from within the company, but I'm not really to sure to be honest.
#3.1 (Edited 205d ago ) | Agree(4) | Disagree(0) | Report | Reply
kneon  +   205d ago
That's how it's supposed to work, but usually the effect is short lived. If investor sentiment remains negative then the stock will just go down again.

Personally I believe share buy backs are usually a waste of capital. If they want to prop up the stock and return value to investors then dividends is a better approach.
jgrigs09  +   205d ago
When a company do share repurchases( stock buy back) it could mean many things. They want the value to go up in their company, is like theEx1Le said. Another reason to me which seems more reasonable. Would be they want to buy back those shares so there are less shares to be bought. They could retire those shares or use those as re-issurance or keep them in treasury stock. Also when companies generate a lot of cash and spend less on capital they put that on their balance sheets. Which makes them a target. Which leads to be taken over. There is a lot more to it, i'm just trying to sum it up as short as i can.
Demoa  +   205d ago
nintendo just stop please
lilbroRx  +   205d ago
Just stop having the best selling games and being the most recognizable gaming company? No, that is not going to happen.
deadfrag  +   205d ago
Stop what?This is actually a great move it will allow Nintendo to own themselfs and not be at the mercy of greedy share holders!
RustedMan  +   205d ago
they are a couple releases away from "angry birdy" their core franchises.
I love Nintendo. I love Sony. I love Microsoft. They all have great things going for them. Have each company made their fair share of mistakes? of course.
Do I blindly follow any particular company, blissfully ignoring their shortcomings while singing their praises as "the superior company". No.
Nintendo needs to get their sh*t together. Microsoft needs to chin up and figure out what it wants to do with itself. I don't much care for the ambiguous "it's an entertainment center!" sentiment. It's very much competing against other "entertainment centers" like the Wii-U and PS4.

While none of that has anything to do with Nintendo buying back it's own stock, and Iwata cutting his salary in half, it has everything to do with honesty and integrity. All three companies are in the business of making money. There's no, "I'm your best friend" regardless of whatever caffeine induced PR head says otherwise.

It's up to us to decipher headlines like these, but take every rant or sleight against a particular product with a grain of salt. Do not blindly align yourself with a company that you think owes you something, nor wish for the impending failure or bankruptcy of said video game company.
#5 (Edited 205d ago ) | Agree(2) | Disagree(2) | Report | Reply
RPG_Lover  +   205d ago
This is a smart business move.
ZeekQuattro  +   205d ago
So now investing in your own company is bad judging from some of the comments. rofl Iwata isn't going anywhere. Its not uncommon for companies to do this to stabilize its stocks which is above Sony's right now. 16.05 versus 16.23. Yup Nintendo is doomed. lol
jgrigs09  +   205d ago
Yea most companies do it so there is a less possibility of being bought out. Spending less on capital and you have a huge chunk of cash having to put on a balance sheet. Is a big target on their backs
lilbroRx  +   205d ago
That last part is the thing that I always find the most mind boggling.

Sony is in far worse shape than Nintendo but everyone article is either praising Sony or damning Nintendo.
ZeekQuattro  +   205d ago
Yeah I couldn't help but notice that too. People see or hear what they want to even when the facts say otherwise.
joeorc  +   205d ago
very smart move by Nintendo, them doing this shows they want to make sure it protects the company further against hedge funds.

Sony did such back in 2004:


Notice of share buy back to acquire shares to be used for stock for stock exchange, and to reserve shares for shareholders who wish to increase their shares to one unit (100 shares)

With regard to the share buy back pursuant to Article 210 of the Commercial Code, Sony has purchased its own shares as follows:

February 4, 2004
(2) Purpose: To allot and deliver shares to the shareholder of Sony Computer Entertainment Inc. which shall become a wholly-owned subsidiary of Sony through a stock for stock exchange on April 1, 2004

Total Purchase Price:

8,199,942,000 yen

This is done to protect the Assets of companies to avoid a Hostile take over, by Hedge funds and Corp. Raiding practice
that many Hedge funds employ.

Nintendo also is making sure that Nintendo is that much harder for Hostile Take over's

My Opinion Good for Nintendo, to many short sighted Cash Grabbing Hedge funds, want to take over some companies just to make a quick buck.
for we are many  +   205d ago
Very smart business move by Nintendo on many levels, which I certainly think is premeditated to take advantage of the undervalued equity knowing that it will surely bounce back following all this doom and gloom madness, to increase equity ownership and protect the company from a hostile take over at the same time.

Some enlightenment from Wikipedia!
"When a company repurchases its own shares, it reduces the number of shares held by the public. The reduction of the float, or publicly traded shares, means that even if profits remain the same, the earnings per share increase. Aside from paying out free cash flow, repurchases may also be used to signal and/or take advantage of undervaluation. If a firm's manager believes their firm's stock is currently trading below its intrinsic value they may consider repurchases. That is, they may repurchase the currently undervalued shares, wait for the market to correct the undervaluation whereby prices increase to the intrinsic value of the equity, and re issue them at a profit."
#9 (Edited 205d ago ) | Agree(2) | Disagree(0) | Report | Reply
lmcontaldi  +   205d ago
Gotcha! That clears it up quite a bit, thanks for the unabashed Wikipedia quoting! lol
stragomccloud  +   205d ago
The comments here are all pretty crazy. Iwata is not going to be fired. 3 out of the 4 of the systems created under him have been red hot successes. The Wii, the DS, and the 3DS. Those have made Nintendo a huge sum of profit. Besides, in spite of their operating loss, they posted a net profit of $100 million. So... yeah. Nintendo is still profitable.
#10 (Edited 205d ago ) | Agree(1) | Disagree(0) | Report | Reply

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