The Switch changed Nintendo’s business and finances. It boosted development on a major platform as well as achieved impressive sales and significantly increased the company’s capital. A situation reminiscent of the heyday of the Wii and DS years, when Nintendo’s financial health was also booming.
Nintendo recently published a “Notice of the Acquisition of Private Equity and Cancellation of Private Equity.” Simply, it means it The company will buy back and later cancel its shares, removing them from much of the company’s shares. Thus, by owning fewer shares (and shareholders), the Japanese company will have less profits to pay back.
This type of financial movement is possible only when there is a strong profitability. Nintendo aims to purchase approximately 1.8 million shares between August 6 and September 15. This total represents at least 1.5% of the company’s shares. It has set a limit of 100 billion yen to spend on acquisitions, which represents about 1.139 billion Canadian dollars.
To take advantage of our preferred cash position based on Switch business performance over the past few years, we are repurchasing our stock as shown on this slide.
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As an entertainment brand, we aim to achieve sustainable growth and increase business value by offering unique entertainment experiences that showcase our strengths. It is essential to have a solid financial base to continue to reserve surprises with our products and services in a sector where trends are often deep and the future is often difficult to predict. Based on this belief, we have maintained sufficient revenue to serve our mission of creating smiles with unique Nintendo experiences.
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Effective use of cash remains an important management tool. We have a strong cash position with Switch business that exceeds our expectations and as a result we have gained a renewed opportunity to consider how to invest our money most efficiently in various strategies and methods. In addition to using a portion of the funds to buy back shares, we will continue to think seriously about how the funds and investments will be deployed in the future.
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Source : Nintendo Japan