Nintendo’s stock doubled in value after the release of the game but they plummeted after the company reminded investors that it didn’t make Pokemon Go. However, investors clearly didn’t google it properly, or perhaps just couldn’t be bothered, because Nintendo don’t own the app; it was a company called Niantic, Inc. that created and published the game.
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THE global success of Pokemon Go was hailed by many as the thing to return Nintendo back to its former glory – but that idea appears to be short lived.
Nintendo, scheduled to report first-quarter results Wednesday, would have to deliver annual net income of about 200 billion yen to justify its market value at yesterday’s close, based on the profit multiples of Japan’s blue chips. The panel was also attended by a lot of the Pokemon GO fans and as expected, one of the question that was asked by the fans was regarding the infamous 3 steps bug that has yet to be patched by Niantic Labs. Macquarie Securities’ David Gibson estimates it to be 13 percent, while Jefferies Group’s Atul Goyal projects it could be as much as 40 to 50 percent. With the company having shown resoundingly that it can generate earnings in the smartphone game market, “I find it hard to believe the stock price will be left undervalued”, Matsumoto said.
Meanwhile, other “Pokemon GO” fans have speculated that all U.S. Wireless providers could be forced to give unlimited data usage exclusively for the game after the congressmen investigated the game.
Trading featured in ‘Pokemon Go’s beta testing, allowing players to trade with those in their immediate vicinity.
Nintendo has an IBD EPS Rating of just 6, meaning it has been outperformed by 94% of publicly traded companies in the last 12 months on earnings per share. Even with that sharp decline though, Nintendo’s shares are still 60 percent up from the shares the company had before the media frenzy of Pokemon Go.
Pokemon Nintendo Shares fell 17.7 percent, registering the biggest reduction in stocks for a company since October 1990, with stocks down by 5000 yen.
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Hanke said Niantic is still focused on fixing server stability.
