Nintendo’s high flying stock has come crashing back to earth after investors realised that the company doesn’t make Pokemon Go. This comes after the immensely popular augmented reality game propelled its valuation above rivals Sony for the first time in decades.
The value of Nintendo’s stock on the Tokyo stock exchange fell by 18-percent overnight; wiping out roughly 708 billion yen (about RM27.3 billion). Bloomberg reports that this could have been a larger number, but the Tokyo stock exchanges has rules that prevent the value of a share from dropping more than 18-percent in a single day.
Pokemon Go is a joint effort between The Pokemon Company and Niantic Labs, neither of which happens to be Nintendo. To be fair, Nintendo did introduce Pokemon to the world and happens to own 32-percent of the Pokemon Company. However, the lack of direct relation has caused investors to dump their shares and cause the value to crash.
The cause of this realisation happens to be a notice from Nintendo about its consolidated financial forecast. The company clarified its position with Pokemon Go, and explained that the previous forecast had already included the potential income from the AR game. In other words, there was not going to be a sudden windfall for shareholders.
Nintendo’s crash also had the knock on effect of dragging several Pokemon Go partners down with it. McDonald’s (which is the first sponsored location partner) dropped by 12-percent; while Pokemon Go Plus device maker Hosiden Corp. sank by 16-percent.
[Source: Bloomberg]
