Nintendo Faces Ban on Some Wii, GameCube Controllers
By Susan Decker
July 22 (Bloomberg) -- Nintendo Co., the world's biggest maker of handheld game machines, is facing a ban on U.S. sales of some controllers for its Wii and GameCube systems after it lost a bid to overturn a $21 million patent-infringement verdict.
This could definitely have something to do with it.. Luckily I sold most of my NTDOY a few weeks ago and I actually sold the rest of my position yesterday so for the first time in 2 years I have no position in this stock.
$21MM is really nothing to Nintendo, but a ban on Wii controllers would obviously be very detrimental. If this all gets cleared up NTDOY will move up fast, but who knows how long that will be...
Nothing to do with Nintendo as a good investment. I held shares for two years and it took me a while to stop looking at every dip and blip with alarm. The Nikki moves in response to the dollar to yen exchange rate; not just because of the conversion, but because the Japanese sell to the US and profits move up and down too. Also Nintendo is thinly traded and the shares traded on foreign exchanges (like NTDOY) are sponsored by banks who do not permit retail investors to short the shares they issue -- that right is reserved for the issuing banks and funds. Hence there is little push and pull in setting the share price except in Japan. Mix that with Nintendo Inc's habit of saying NOTHING between quarterly reports, and you have a recipe for volatility. On the other hand the company is rock solid, a strong dollar favors profits, and they are still selling every console they make as quickly as it finds a shelf. I have been trying to play the dips for about 6 months and when I get stuck, I just wait for the "earnings rally" and get ready for the next plunge. I think the earnings rally is related to the conservative earnings estimate that Nintendo issues anually and then raises every quarter. For example the dollar is stronger than they estimated last quarter, so they will raise guidance for that, they are not building inventory, so up a little more, and Wiifit is a hit so up goes guidance a little for that. Up goes guidance, up goes the share price, and then boredom sets back in.