Nintendo Shares Plummet After Investors Realize It Doesn't Actually Make Pokemon Go (theverge.com)

Sam Byford, reporting for The Verge: Nintendo shares have skyrocketed since Pokemon Go's release and instant transformation into global cultural phenomenon, but they fell dramatically today after investors realized that Nintendo doesn't actually make the game. Nintendo put out a statement after the close of trading on Friday pointing out that the bottom-line impact will be "limited" as it only owns 32 percent of The Pokemon Company, and that revenue from the game and its Pokemon Go Plus smartwatch peripheral have been accounted for in the company's current forecasts. Pokemon Go is a collaboration between The Pokemon Company and Niantic Labs, the developer who previously created the similar AR game Ingress as part of Google. This apparent revelation caused shares to plummet in Monday trading, with the stock dropping 17 percent at one point, representing about $6.4 billion in value; as Bloomberg notes, Tokyo stock exchange rules prevent share prices from moving more than 18 percent in a single day.

Comments

Re:Breaking news: investors are idiots

[geek]

The real news here isn't really about Nintendo or Pokemon.

The real news is about investors pumping billions into a company without even the most cursory research.

Gotta jump on them stocks fast!

Is this accurate?

[wardrich86]

Did they really jump-ship for that reason? Nowhere in the game is Nintendo even mentioned. I never did understand the stock jump with Nintendo, though. I figured if anything, Pokemon Company, Game Freaks, or Niantic would be the ones that would skyrocket (assuming they're tradeable companies).

Now I'm seriously confused as to how the stock market works. Is it really full of that many idiots that just throw money at anything without doing ANY research beforehand? The only real tie that Nintendo has with Pokemon is their tie to The Pokemon Company, so why didn't people jump on those stocks?

Re:idiots

[Touvan]

Nintendo's position seems to be that they can keep innovating in the console space, and keep their position atop a heap of their own making. They don't want to deliver on someone else's platform, because it isn't as profitable. They are going after big long term profit, not reactionary short term profit.

No matter how many times folks at Nintendo explain this, people still don't seem to get it - maybe the same people who invest in Nintendo after another company releases Pokemon Go. Or maybe because it's a bigger gamble or bolder play, and most people are very risk averse, they can't wrap their heads around it?

Re:"Business People"

[chipschap]

The stock market is insane. I never understood why the market would shoot up or down in a matter of hours based on some transient event. I blamed it on the stupidity of traders and their shortsightedness. That isn't completely wrong but then I read about our favorite people, hedge fund traders, having to make large short-term profit to stay alive. (It would be better if they all disappeared, I think, but that's another discussion.)

Re:Breaking news: investors are idiots

[pr0fessor]

I don't play the game or invest in nintendo but even I already knew this. My brother pointed out that Niantic had made another game he thought sucked the day it came out.

Re:"Business People"

[angel'o'sphere]

I don't know who gave this analogy:

The stock market is like a bet on the outcome of a beauty contest.

You see all the beauties, and probably can easy pick your favourite, however: you have to bet whom the jury will choose.

Betting who the jury will choose, is a complete different thing than deciding which is the most beautiful or agreeing with friends at a table about the three most beautiful ones.