Shares of Nintendo have fallen by about 10% over the weekend. On Friday, June 1, the securities of the Japanese company lost 4% of their value, and by Monday, June 4, they fell by another 6.3%, dropping to the level of December 2016, Bloomberg reports.
Stock price of Nintendo, Google
According to Bloomberg, the sharp drop in Nintendo’s quotes has worried many investors — analysts have reported dozens of requests from investors and hedge funds who want to know the reasons for the collapse of the Japanese company’s exchange rate.
Experts do not have a consensus on this yet. They put forward different theories — from the lack of unexpected announcements from Nintendo at the annual E3 exhibition to problems with online gaming support.
According to rumors, this year at E3 Nintendo will announce the release of the popular “battle royale” Fortnite from Epic Games on the Nintendo Switch platform. In addition, on May 30, the company announced the release of new games for the Pokémon franchise. Analysts believe that the market has already reacted to this information and decided that this is not enough to predict economic growth for Nintendo.
In addition, gamers have repeatedly complained about connection problems and long match selection in such Nintendo games as Splatoon 2 and the recent demo version of the Mario Tennis Aces sports game, which some users could not play due to strong lags.
According to Amir Anvarzadeh, a senior analyst at the Singapore-based company Asymmetric Advisors, Nintendo is lagging far behind Sony and other gaming companies in the development of network infrastructure and services. This may change, but it will require significant expenses.
Another reason for the sharp drop could be the descent of the Nintendo exchange rate below the 200-day moving average* last month, which became a signal for traders to sell the company’s securities. Bloomberg clarifies that Nintendo shares have fallen below their moving average indicator for the first time in two years.
Moving Average of Nintendo, Nasdaq
Nintendo itself declined to comment on Bloomberg’s stock drop.
*Moving average (MA) is an analytical indicator of the behavior of securities quotations on the stock exchange. A popular trading strategy is to buy stocks when the price chart crosses its MA from the bottom up and sell them when the price chart crosses the MA chart from the top down.Also on the topic: