Nintendo Needs More Than Flashy Buybacks

The Wall Street Journal2021-08-05

A big share buyback will help cushion the blow from disappointing results, but isn’t a strategy for the future. A surprise share buyback from Japanese gaming champion Nintendo Co., Ltd. should help...

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Comments

nctony
2021-08-07
nctony
Is a good buy from now[財迷]
kcwang4982
2021-08-06
kcwang4982
Gambare
- kcwang4982:
  Skills
Likeabull
2021-08-06
Likeabull
Good
SFern
2021-08-05
SFern
Good
- SFern:
  Lol
teow0023
2021-08-05
teow0023
Like!
lowniu
2021-08-05
lowniu
Like please. Thx
- CMK30:
  Sure

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Nintendo’s profit decline isn’t a surprise given its exceptional performance last year due to stay-at-home demand. The company sold fewer of its Switch consoles and games during the quarter, compared with the same period last year. “Animal Crossing: New Horizons,” released in April last year, isone of its fastest-selling games. Component shortages also continue to be an issue in production and distribution of its consoles.\nWhat surprised investors is Nintendo’s decision to spend up to ¥100 billion, the equivalent of $910 million, to buy back 1.51% of its own stock. Buybacks arerare for the Japanese company—last one was around ¥30 billion in 2019. Investors have long hoped Nintendo wouldimprove its capital allocation. The company is sitting on around $10 billion of cash as well as nearly $6 billion of securities. Nintendo said its strong cash position, due to better-than-expected business from Switch, is the reason for the buyback. That seems to indicate it could just be a one-off since the boost from Covid-19 likely won’t be repeated.\nThe rare buyback will likely boost Nintendo’s share price in the short term, but the company needs to prepare for leaner times ahead too. The stock has dropped 14% this year, underperforming the broader Japanese market as well as peers such asSony.One worry is thetraditionally cyclical natureof the console business. The pandemic has probably prolonged the cycle, but the Switch console is likely past the middle, entering its fifth year. Growing Nintendo’s online business would help improve margins. Better use of its popular intellectual properties could also help diversify income sources.\nNintendo reaped a windfall from the pandemic. 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please. Thx&nbsp;","listText":"Like please. Thx&nbsp;","text":"Like please. Thx","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/899174052","repostId":1164213999,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":5437525,"gmtCreate":1628173292377,"gmtModify":1663231976945,"authorId":3574125117754882,"author":{"id":3574125117754882,"idStr":"3574125117754882","authorId":3574125117754882,"name":"CMK30","avatar":"https://static.tigerbbs.com/43c4c66c8dccee80d1a55babd7965c97","vip":1,"currentWearingBadge":{"badgeId":"7a9f168ff73447fe856ed6c938b61789-1","templateUuid":"7a9f168ff73447fe856ed6c938b61789","name":"Knowledgeable Investor","description":"Traded more than 10 stocks","bigImgUrl":"https://static.tigerbbs.com/e74cc24115c4fbae6154ec1b1041bf47","smallImgUrl":"https://static.tigerbbs.com/d48265cbfd97c57f9048db29f22227b0","grayImgUrl":"https://static.tigerbbs.com/76c6d6898b073c77e1c537ebe9ac1c57","redirectLinkEnabled":0,"hasAllocated":1,"isWearing":1,"stampPosition":0,"hasStamp":0,"allocationCount":1,"allocatedDate":"2022.01.27","individualDisplayEnabled":0,"individualDisplaySort":0,"categoryType":1102},"crmLevel":3,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":899174052,"type":1,"supId":0,"prevId":0,"content":"Sure","text":"Sure","html":"Sure"}],"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":92,"commentSize":16,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/1164213999"}