"Shakes"? What does that mean?
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Nintendo initiates 9.5 million share buyback ($1 billion, Yamauchi inheritance)
- Thread starter Captain Smoker
- Start date
"Shakes"? What does that mean?
Sorry, "shake".
dickgumshoe
Member
No, it has to be a good or bad thing, so I can use it to attack or defend Nintendo in forum wars.
If other people acquire the shares from Yamauchi's family, they (Nintendo) run the risk of yielding too much external control. Some hedge fund investors have bought a lot of shares of Darden Restaurants' stock and that only has amounted to like 3 or 4% but that has been enough to force them to drastically change the company's course over the next few years.
That doesn't clear it up for me. What are you getting at?
It would be exceptionally complicated and expensive, and would require taking on lots of debt.
Here is their cash + short term in jpy:
Code:
March 2009: 1,220,148
March 2010: 1,252,321
March 2011: 1,171,076
March 2102: 958,322
March 2013: 903,301
Dec 2013: 966,036The December number isn't exactly comparable, due to seasonality, but it gives you an idea of where they are heading.
I find it difficult to believe any acquisition target would prefer Nintendo shares over cash.
I could have sworn Iwata was the one in charge during the DS/Wii generation where Nintendo was at it's most profitable ever.
Seriously Iwata had some major success and some major failure and he's still in the hot seat calling the shots. You can't accurately say leaving him in charge was a poor one until you see the outcome, especially considering he had a track record of massive profit last gen. In time we'll see.
Iwata did make some colossal blunders with the WiiU though, I don't think anyone can deny that.
Yes, their balance is the same AT THE MOMENT. However, they can't use this money for anything else now, so they are effectively worse off than before.
And now take into consideration that Nintendo's stock price is in decline because investors are unable to "please understand". That means the value of those treasury stocks will decline and Nintendo is going to have less capital than before.
If the stock price goes down 10%, then the treasury stocks are worth $120 million less.
Ray Wonder
Founder of the Wounded Tagless Children
Do they just not want the investors to be down their neck about doing what they want?
Pie and Beans
Look for me on the local news, I'll be the guy arrested for trying to burn down a Nintendo exec's house.
Ah so I was right that this was mainly due to Yamauchi shares possibly going to destabilising owners moreso than inflating the stock value. Not a good time to have to splash this cash out, but thats the price of when a big family bows out.
Danny Dudekisser
I paid good money for this Dynex!
1. Fewer shareholders means they have more power. If Iwata wants to be a tyrannical ruler, then he can be!
2. Prevents hostile takeovers (well, if by doing this, they eventually do go private). When people know Nintendo's struggling, they become a target for acquisition. By buying back shares, Nintendo hopes to avoid another party getting enough shares to take over.
Kadin
Member
So looking at Nintendo's future, is this a good thing what they're doing or is it some act of desperation from preventing something bad from happening? I guess the latter is still a good thing but is this something that's more reactionary based from recent news or something that would have happened regardless and has been in the works for some time?
kiunchbb
www.dictionary.com
Nintendo buying back their own stock while it is cheap. Not only this will artificially increase the stock price, it also give cconfident to the stockholders. I wouldn't mind if Nintendo go all the way and become private.
I highly doubt the decision made by the investors will benefit the company in the long term, all they want is a quick cash in by forcing Nintendo to become another farmvilla.
I highly doubt the decision made by the investors will benefit the company in the long term, all they want is a quick cash in by forcing Nintendo to become another farmvilla.
Lactose_Intolerant
Member
please read the thread
vinnygambini
Why are strippers at the U.N. bad when they're great at strip clubs???
Yeah I saw that too. I'm thinking Nintendo uses their treasury shares as method of payment for their acquisition.
Aquamarine
Member
Technically yes, but Iwata and Yamauchi worked together to develop the success behind the DS and the Wii. Just because Yamauchi was no longer CEO in 2002 doesn't mean he no longer did anything with Nintendo.
When Iwata took over, Yamauchi stayed on the Board for three years to oversee Iwata's leadership and ensure he wouldn't fuck anything up. During that time he worked with Iwata on Wii and DS strategy.
I would say that Yamauchi continued to have influenced Nintendo until around 2007-2008 when he retired for good.
The 3DS is the first real console that Yamauchi had absolutely nothing to do with the console or its games.
Yamauchi was an owner friendly to the board. His shares going to someone else who might not be so friendly would reduce their power. So they buy back the shares to maintain the status quo. Also, in converting cash to shares it means they can't collect interest on it but they also no longer need to pay dividends to Yamauchi.
It does not reduce the warchest. The money has just been converted to stock. They can buy other companies using the shares if they want. If the shares go down then yes that would reduce the 'warchest' but equally, if the shares go up that would increase the 'warchest'. Nintendo are also a very cash rich company so none of this is going to make a difference in the real world any time soon.
If want to get overall control they'd need another 33.5% of the shares which would cost around $6B. They could do it, but it's probably a bit too much.
It does not reduce the warchest. The money has just been converted to stock. They can buy other companies using the shares if they want. If the shares go down then yes that would reduce the 'warchest' but equally, if the shares go up that would increase the 'warchest'. Nintendo are also a very cash rich company so none of this is going to make a difference in the real world any time soon.
If want to get overall control they'd need another 33.5% of the shares which would cost around $6B. They could do it, but it's probably a bit too much.
Unless they're intending to sell themselves to another company, you would want to keep the cash on hand so you have more money to spend on things.
Not in this instance they want the treasury shares to use in m&a transactions.
vagabondarts
Member
Agent Unknown
Member
I was kind of hoping the Yamauchis would use their shares to help instigate a Roy Disney style revolt similar to when Eisner was forced out back in '06 when his management had gotten so bad Pixar almost left for Dreamworks. So much for that fantasy.
On the one hand, this is good in that it will help prevent them from being pushed and nagged towards mobile and third party. On the other hand, Iwata is still in charge and while I agree with his stance on those issues, it's very questionable at this point whether he's capable of turning things around in addition to competently prepping for the next systems.
On the one hand, this is good in that it will help prevent them from being pushed and nagged towards mobile and third party. On the other hand, Iwata is still in charge and while I agree with his stance on those issues, it's very questionable at this point whether he's capable of turning things around in addition to competently prepping for the next systems.
Really? Which companies have done this?
Why would anyone want Nintendo shares rather than cash? If that's what they really wanted, couldn't Nintendo do the buyback at that time? Or they could just use the cash to buy the shares on their own?
Femmeworth
Banned
They could probably do it if they wanted to, but I have no idea if it would be a good idea for them.
In my very uninformed opinion I think they should go private. Though it kinds of seems like they function as a private company anyway.
Going to quote this again. I don't think there was much choice in this, nor surprise, nor predictions to be made because of it. I'm glad that it seems to be happening in an amicable way with the shareholders (purely based on me not seeing any news to the contrary).
Cygnus X-1
Member
Exactly. This of course explain lot of things.
Osiris
I permanently banned my 6 year old daughter from using the PS4 for mistakenly sending grief reports as it's too hard to watch or talk to her
A little here and a little there?
It's gone down nearly $7 billion in less than two years, those 'little' bits are adding up
Yeah, pretty much.
You can use shares or money in a M&A transaction. Most would prefer solid money to shares, especially since the shares of a parent company often go down after a merger (the parent is taking on added expenses and operating costs, bringing profits down).
Wishmaster92
Member
Activate it.
TheRealTalker
Banned
Damn and I was already opening up my piggy bank... :/
Next time Nintendo... Next Time
Next time Nintendo... Next Time
KojiKnight
Member
Rogue_Ledr
Banned
Considering their stock is dropping, this is just losing money.
A little here and a little there?
It's gone down nearly $7 billion in less than too years, those 'little' bits are adding up
I agree with you, I was just joking
who mentioned the US? and 10% less on a million is quite a bit better, actually. $100,000 better.
anyway, this news means that they're making a 2D metroid game for the Vita
BobTheFork
Member
Ok, that's what I was thinking. Buying back shares in order to make sure the owning percentage always stays in the company.
In theory, that is a possibility if I remember my business unit at university correctly.
That's not how it works. The shares in question aren't purchased on the stock market, they are sold directly to Nintendo.
And Nintendo purchasing them is no sign of confidence; they simply had no other choice. Had Yamauchi's heirs sold them on the market, then Nintendo's stock price would have crashed.
The stock has dropped ~20% just last month, so now would seem an opportune time to buy back stock, as it's cheaper, no?
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