They're not just getting by. They're posting losses for the first time in history, and have since had trouble moving their primary gaming device (which is being sold at a loss in the first place).PedroSteckecilo said:
BigTuk said:
Report: Nintendo Founding Family Seeking to Sell Company Shares
- Thread starter Alex Co
- Start date
Wouldn't think much of it at all honestly.I'd just assume that,like the Yamauchi family,there could be a myriad of reasons why they're selling up and it's not necessarily a negative oneBigTuk said:
And you could well turn out to be correct.However until we have definite information I'm not going to jump to negative conclusions which the games media seems only too eager to do when it comes to Nintendo these days
This is a pretty big deal. If anything, you should take it as an affirmation of Nintendo's status. It's still revered as THE game company that is solely a game company, thats a good thing. So when something bad is happening, people want to know whats up. It's just news. As to why nobody lost their shit with Sony, Sony has other things that it markets and posts profits on other products besides games.Dragonbums said:
It's something bad that has happened before to the dreamcast, so people draw parallels. Most people seem to indicate that Nintendo didn't know how to market it's console. They ended up pleasing nobody other than their loyal fans. The market has changed, and companies must adapt when that happens, Nintendo is no exception. Thing is, Iwata has already indicated they won't be changing that much. Not good considering his standing in the company and shouldering the blame.
They have tons of money in the bank, an absurd amount. They aren't going anywhere. But if they actually want to post profits the sizes they projected to their shareholders, something has got happen. No company is going to waltz in an knock off Nintendo. They're too big, but at the same time, they can't pretend that they aren't in competition with Sony or Microsoft anymore.
Insider activity (people who have 5% of the company or more) is actually a major key that investors watch when considering a stock. A group owning 10% or more of stock is absolutely worthy of being watched and the fact that they're heading to sell while the stock is low does not cast a positive light on their opinion of Nintendo's financials. For example, if the people who should be in the know buy more stock, wouldn't that give you confidence in buying more stock?Dragonbums said:
On the other hand, this would be and ideal time to sell even if you have faith in Nintendo. You sell now, it's likely to drop a hell of a lot more at the end of this fiscal year considering the dismal numbers they've been putting out, and then you just buy back in at a lower number. 10% ownership could become 15% ownership or more if played right. It isn't even insider trading since nearly everyone sees the bad numbers looming. This is actually an ideal time for Nintendo to buy outstanding shares. Buy while it's low.
If Sony had a single investor that owned this much of their stock want to sell, then hopefully they would report it. But frankly, Sony doesn't have a private owning family that is publically known. Nintendo does. Remember when Gates sold stock in Microsoft? That was in the news.
Sony losing $5billion was reported on. But after it was released, what's the point of releasing it again? Nintendo bet hard on something that is failing horribly. This is noteworthy and should be reported. Did you know that Nintendo's WiiU is the number 1 flop of 2013 in most finance circles? Even non-gaming sites notice a flop this epic. It's terrible that it's happening to the legend that is Nintendo. But I see no reason why news agencies should be silent about it for some unknown reason.
Do I really have to point out that it's not "Bill Gates sells his shares", but "Bill Gate's many sons, whom just happen to have inherited his shares, split and sell theim back to Microsoft, which has enough money to buy them all in a whim".BigTuk said:
Apparently I am the only one noticing that it's Nintendo itself buying the shares. That will increase the % of dividends from the remaining shares, if not the value itself (because after all the company has to expend the equivalent money to buy them out).
All that actually matters is that a group who owns over 10% of Nintendo is selling. That is news worthy just like Gate's plans to sell his Microsoft stocks over the next several years was also in the news back when it was learned. Imagine this phrase reworded to, "10% of investment capital withdrawn from MAJOR company". It's huge.Qvar said:
Nintendo buying it's own shares now is really smart. They've gone from over $40/share within the last five years to under $15/share. If they have a better future, that's brilliant. If they have a worse or similar future then it's depressing.
To be fair, Sony does more than just video games. They could also sell one of two of the dozens of film studios they own to eliminate their debt at this point. Nintendo doesn't have such options. Also, keep in mind that the $300 million loss is coming after the Wii started losing money at the tail end of its time in the previous generation.Dragonbums said:
What matters isn't so much the reason behind it. Having 10% of your investment capital walk out the door is news any way you look at it.Galen Marek said:
There are other reasons to sell now as well.
Good reason:
You (the investor) believe that Nintendo is going to have a bright future longterm but a shitty generation. So you sell now and buy back in at a lower price. The family could then own a significantly larger amount of Nintendo. If the price of shares halve, then they'd own closer to 16% of Nintendo for example.
Bad reason:
If you believe Nintendo is going to tank from here on out, then there's no time like the present to drop the stock.
Neutral reason:
You want money, not stock.
Just as an aside, Sony actually has enough cash on hand they could pay off their entire debt without selling anything. The doom and gloom bankruptcy criers are just retarded.AzrealMaximillion said:
First debt interest is deductible, lowering their overall tax load. Second, its potentially a corporate strategy to keep a debt load so they aren't pressured to pay dividends. Sony keeps their debt load 1-2b lower than cash on hand at any given time. They have more debt than stock value, but they honestly don't care about their stock value. They're in a similar position to Google, where they can finance r&d and acquisitions almost purely on interest of their bank balance. They don't -need- to care about their stock. Right now they're cutting their chaff before it gets out of hand, but they arent in the dire straits some people think they are.Ultratwinkie said:
I don't know one way or the other on whether or not Sony has the cash on hand but sometimes it is more strategic to pay off debt over time rather than all at once.Ultratwinkie said:
Debt does not necessarily grow over time. Hopefully they're at least paying the interest. Most loans to businesses require at least that be paid so that the principle doesn't increase.
I've seen some scenarios where the ability to write off debt payments offsets the interest fees in a way that encourages holding onto the debt or at least makes it less attractive to pay off immediately when combined with returns on investment on the cash being onhand. Imagine a scenario where your debt is ultra low in the interest department to the point where leaving cash in the bank in CDs or whatever actually nets you an extra percent back more than the debt costs you. Why pay back the debt?
I have debt that's in the ultra low 3.5% APR range. It is the absolute lowest priority on my mind with my personal investements having not made less than 4% since 2007-2008 and even that year was still around 1.5% return. I've had years where my investments hit 25% or more on return and I definitely don't have access to a finance department like Sony does. That's not to say I'm wealthy, percentages don't say anything about the amount of money invested but it does scale up. If I'd had millions of dollars to invest I'd still have made those percentages and so this relates to Sony directly. I'd imagine they could easily return 10% or more without any kind of concern.
Likewise, paying off the debt doesn't really do anything to the present situation. You'd just be decreasing the cash asset account while decreasing the liability account. On paper it'd be a net-0 change and instead of reporting a large debt you'd be reporting a large loss in the asset category.
Accounting is a hell of a thing. But Sony's problem wasn't the debt, it was the operating loss they took from a bad movie investment in addition to a few other things (some of them investing in the PS4 which is looking to be profitable almost immediately).
10% of their investment walks out? Ouch.
The move doesn't speak highly of future confidence in Nintendo's long term business.
In fact, it screams "NO CONFIDENCE IN CURRENT LEADERSHIP" to me. With Nintendo buying the shares back, it ensures a lower total of liquid capital for re-development, which they're going to need for sure within the next few years at least.
Which isn't to say they can't re-develop and turn their failing trend around...over 5 Billion in the bank is still a lot of money, but given what it cost M$ and Sony to develop their next-gen consoles AND the fact that Nintendo is running development costs for several (slow-working) Nintendo needs to spend very wisely in the next few years or pool their efforts with someone else.
Best thing that can happen is first party software over-performs enough to encourage investors to return on the cheap, while they re-develop or re-prioritize their flagship products (swap from home systems to handhelds).
The move doesn't speak highly of future confidence in Nintendo's long term business.
In fact, it screams "NO CONFIDENCE IN CURRENT LEADERSHIP" to me. With Nintendo buying the shares back, it ensures a lower total of liquid capital for re-development, which they're going to need for sure within the next few years at least.
Which isn't to say they can't re-develop and turn their failing trend around...over 5 Billion in the bank is still a lot of money, but given what it cost M$ and Sony to develop their next-gen consoles AND the fact that Nintendo is running development costs for several (slow-working) Nintendo needs to spend very wisely in the next few years or pool their efforts with someone else.
Best thing that can happen is first party software over-performs enough to encourage investors to return on the cheap, while they re-develop or re-prioritize their flagship products (swap from home systems to handhelds).