Stock Market
Though Nintendo is based in the Tokyo Stock Exchange (TYO), it is traded in the U.S. on the Over-The-Counter (OTC) exchange under the symbol NTDOY. Nintendo stock is unique in the fact that it trades based on 100 shares to one unit of stock . For this reason, the TYO stock quote for Nintendo is ____ , while the share-based OTC share price is currently ________ (5).
In response to the release of the app Pokémon Go on July 6th, Nintendo has experienced massive rises in stock price. Stock price jumped from $14,660 per unit of stock (July 1, 2016) to a $31,770 high on July 19th. Comparatively, 441.1 thousand shares were traded on the 1st and 220.66 million were traded on the 15th. For reference, Nintendo has a 5-year average of
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Nintendo’s fiscal year takes place from April 1st to March 31st. Thus, Fiscal Year 2016 will take place from April 1, 2016 to March 31st, 2017.
There is an interim dividend, calculated as:
33% of consolidated operating profit for the 6-mo period / shares outstanding at the end of the 6-mo period
There is also an annual dividend, calculated as:
The greater of
33% of consolidated operating profit for the fiscal year
Total shares outstanding at the end of the fiscal year
Or
50% of consolidated profit attributable to owners for the fiscal year
Total shares outstanding at the end of the fiscal year
Less the interim dividend paid
See Appendix C for an infographic depicting Nintendo’s dividend policy.
Expected Returns
Based on Nintendo’s most recent earnings forecast, published July 27, 2016, Nintendo expects to pay dividends based on 50% of consolidated profit attributable to owners. The interim dividend will be paid on September 30, 2016 and is undecided at this time. Financial forecasts estimate that there will be an annual dividend of 150 yen per share, or $1.46 per share (using 1 USD = 102.91 yen, June 30th). (14) The estimate is based on a projected net sales of 500,000 million yen ($4.858 billion) and 291.35 yen in net income per share ($2.83).
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(MORNINGSTAR)
Stock Performance
Nintendo initially went public in Japan in 1962 after its success in producing playing cards. Nintendo hit its highest stock price of $70,500 on November 2, 2007 in response to the release of the original Wii console. Its five year low took place on August 3, 2012 at a price of $8,340 per stock unit as a result of underwhelming Wii U sales.
Stock price rose at small increments up until April 2015, when the company announced a partnership with the mobile software producer DeNa. This led stock price to soar upwards of $15,000 per unit. Later, on August 28, 2015, Nintendo filed a patent for an upcoming console labeled as the NX, also leading stock price to increase to $24,170. The most recent increase in stock price was in July 2016, with the surprise release of the mobile app Pokémon Go. Market speculation resulting from the app led stock price to reach its five year high on July 19, at a price of $31,770 per stock unit. Stock price has declined since July, to a price of $23,015 per unit.
Figure 1 depicts the changes in Nintendo’s stock price, coupled with the products that influenced