Nintendo Co., Ltd. (OTC: NTDOY) was proud to be part of the Pokémon Go release on July 6, when their shares were sitting at $17.703. By Friday, July 8, Nintendo stock had risen 10% ($20.73) and by Monday July 11 the stock was up a full 23% ($27.70). It didn’t stop there. It reached its peak the following Monday ($37.37) when the stock rose a full 120% from its opening price on the release date. But then, suddenly it started plummeting. What happened?
Investors obviously had not done their research. After riding high on the Pokémon horse, Nintendo announced their limited share in the games developers Niantic Inc and Pokémon Co. on July 22. The correction that Nintendo only had a 13% share in the game drove share prices down on July 25. Nintendo stock fell 11% in its U.S. shares and dropped 18% in Tokyo, the maximum one-day move allowed by the market. On August 1, the stock closed at $25.50, having lost more than half of its gain. What this shows is that many investors do not understand the tech industry and are quick to jump to conclusions about brands – more research is required, and that has to do with understanding tech developments in more depth.
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