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Nintendo Buys Back Shares

by Jon Lindemann - August 30, 2004, 4:08 pm PDT
Total comments: 4 Source: Reuters

Nintendo buys back shares in Japan to appease investors.

On Friday, Nintendo Company Ltd. (NCL) announced that it will buy back $43 billion yen's worth ($391 million USD, 1 USD=110.051 JPY) of its shares in an effort to boost its stock price and appease investors.

The buyback amounts to 3.6 million shares bought at the Friday closing price of 11,920 yen. The actual transaction took place Monday morning before trading began on the Tokyo Stock Exchange.

Talkback

vherubSeptember 01, 2004

I'm not a stock market analyst, but I play one on the internet:

Agreed, stock buyback is a good thing for Nintendo. It generally occurs when a company wants to stimulate interest in the stock price and/or they see the stock at a good value. Afterall, who better to determine whether a stock is over/under valued than the company itself, right? In this case, Nintendo stock has taken a hit recently, mostly due to overreation from investors on Sony's entrance into the handheld market.

However, less stock does not neccessarily mean stock will be more valuable (oh if only it were so easy), and this is a point on which expensing stock options hinges. When a company gives stock options, this increases the amount of stock out there, so your stock reflects a smaller percentage of the company, but the stock price has not neccassarily gone down in value.

While stock buyback is almost always good, sometimes it takes place when a company wishes to fortify itself in case of a takeover attempt. (not to fan any rumors as this is not the case)

KnowsNothingSeptember 01, 2004

Buy more General Electric stock. GE will never die.

I'm glad vherub was here, becasue otherwise I would have been in the dark about how that really affected Nintendo or what now.

KDR_11kSeptember 01, 2004

Didn't Nintendo's stock INCREASE after the PSP (or more exactly: more details about the PSP) was announced?

ruby_onixSeptember 01, 2004

Yeah, sort of.

I think it dropped big when the PSP was first announced, but then after rumors about the PSP's price (retail-level "guess" preorder prices, which seem a good deal lower than any of the "real" rumors that seem to have more substance to them) started to leak out, AND first info about the PSP's poor battery life both came to light (around E3), Nintendo's stock price climbed partway back up again.

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