Report: Nintendo Founding Family Seeking to Sell Company Shares

Report: Nintendo Founding Family Seeking to Sell Company Shares

Nintendo

Hiroshi Yamauchi's family is looking to sell ts company shares, with Nintendo preparing to buyback $1.1 billion worth tomorrow.

Following Nintendo's financial reports that were less than stellar, Hiroshi Yamauchi's family, who inherited the former Nintendo CEO's shares when he passed away last year, now has a "desire to sell" their shares in the company. In a report on Bloomberg, it states Nintendo will purchase as many as 9.5 million shares, or 7.4% of its outstanding stock at 12,025 Yen apiece, with the buyback said to total 114.2 billion Yen or $1.1 billion in US currency.

Yamauchi's inheriting family, comprised of four of his children, owns 10% of company stock. It's not currently known how many of the founding family's stock will be unloaded, with Nintendo spokesman Yasuhiro Minagawa saying, "We are not in a position to know how much shares the Yamauchi family will sell."

To take responsibility for the Wii U's abysmal sales, Nintendo CEO Satoru Iwata and other executives have agreed to have their salaries reduced. Even with the pay cut, Iwata is not done looking to remedy Nintendo's business woes, as the company CEO also revealed just a few days ago that he is considering mergers and acquisitions for Nintendo.

While Nintendo's stock is presently taking a hit, the video game company has $8.6 billion banked in terms of cash and equivalents, and has no debt as of September 30, 2013.

Should Nintendo fans be worried? With the way things have been swinging, recent developments might be a cause for concern, but we don't know for sure until it happens.

Source: Bloombeg via NintendoLife

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Honestly, it seems this is a whole butt load of overreaction. Or at the very least, new sites making it a huge fucking deal. I didn't see people scrambling to do this when Sony announced they lost $5 billion fucking dollars and both their headquarters at the initial launch of the PS3.

But everyone runs with their heads off? over a $300 million loss over the Wii U?

8.6 billion in the bank!?

300 million loss over the Wii U.... Chump change.

Can't say that Nintendo are too pleased at the founding family's timing in this affair however...

could this possibly be due to legal reasons? The shares were only just signed over after various red tape, the family intended to sell anyway. just a thought

That's the problem with a company grown accustomed to being super successful... just getting by is no longer enough for its shareholders, they've gotta be making mad bank or all that money helping keep the company afloat is going to go elsewhere.

Not that I think Nintendo "really" deserves to fail... but it seems like they are making some bad decisions...

Should Nintendo fans be worried? With the way things have been swinging, recent developments might be a cause for concern

Way things have been swinging? Recent developments? Pretty much most of the recent articles you guys have made about Nintendo have been completely false.

The only one which wasn't complete bull was the article about Iwata saying "We haven't ruled out mobiles"

PedroSteckecilo:
That's the problem with a company grown accustomed to being super successful... just getting by is no longer enough for its shareholders, they've gotta be making mad bank or all that money helping keep the company afloat is going to go elsewhere.

Not that I think Nintendo "really" deserves to fail... but it seems like they are making some bad decisions...

No, the shares are just being sold over to Nintendo, nothing's happening to them.

Mr Ink 5000:
could this possibly be due to legal reasons? The shares were only just signed over after various red tape, the family intended to sell anyway. just a thought

That sounds like the most likely reason behind this.

chiefohara:
8.6 billion in the bank!?

300 million loss over the Wii U.... Chump change.

Can't say that Nintendo are too pleased at the founding family's timing in this affair however...

Were do you get the 8.6 billion figure?

http://www.nintendo.co.jp/ir/pdf/2014/140129e.pdf
as of 31st December 2013

Current cash $5.5 billion

Total current assets $13.2 billion

Total assets $15.6 billion

Liabilities (owed to suppliers) $1.6 billion

chiefohara:
8.6 billion in the bank!?

300 million loss over the Wii U.... Chump change.

Can't say that Nintendo are too pleased at the founding family's timing in this affair however...

The PS4 costs billions to make. Just on R&D, licenses, and getting things running. Not counting the long term.

Same with xbox one.

If the Wii U doesn't get Nintendo its money, it won't have the money to make a new console. This shit gets exponentially expensive. You are forced to deal with AMD or Nvidia now. When the next gen comes around, they dictate what you get and for what price.

And they aren't cheap. Nvidia turned both Sony and MS away for not paying enough. These are huge companies. Only AMD went through with the deal, and that was because it was going bankrupt.

Why do you think investors wanted xbox to go away? Why would Sony abandon consoles if the ps4 didn't sell well?

Because its getting to the point that no one can afford to make consoles anymore. "billions" is chump change to these corporations. The only reason consoles exist now is to push other products the company is selling. or to help build consumer trust.

Its only big money to us, the peasants, working 5 days a week for 1/1000000000th of that these guys make.

Kmadden2004:

Mr Ink 5000:
could this possibly be due to legal reasons? The shares were only just signed over after various red tape, the family intended to sell anyway. just a thought

That sounds like the most likely reason behind this.

hey, look at us, a couple of gamers being reasonable. who'd have thought it.

So basically this story boils down to..

"Shareholder dies.Family who inherited shares decide to cash in by selling said shares back to the company"

Would this even be reported anywhere apart from the likes of Forbes if it wasn't Nintendo involved?

Mr Ink 5000:

Kmadden2004:

Mr Ink 5000:
could this possibly be due to legal reasons? The shares were only just signed over after various red tape, the family intended to sell anyway. just a thought

That sounds like the most likely reason behind this.

hey, look at us, a couple of gamers being reasonable. who'd have thought it.

Shhhh, not so loud.

The fanboys hunt guys like us for sport...

;p

MetalDooley:
So basically this story boils down to..

"Shareholder dies.Family who inherited shares decide to cash in by selling said shares back to the company"

Would this even be reported anywhere apart from the likes of Forbes if it wasn't Nintendo involved?

Uhm.. here's the thing, why sell shares that pay dividends. It is in most business circles a bad sign when the founders start selling off their shares...since it usually means they don't see the share value going up anytime soon and may have reason to believe the share value will likely drop.

Kumagawa Misogi:

chiefohara:
8.6 billion in the bank!?

300 million loss over the Wii U.... Chump change.

Can't say that Nintendo are too pleased at the founding family's timing in this affair however...

Were do you get the 8.6 billion figure?

http://www.nintendo.co.jp/ir/pdf/2014/140129e.pdf
as of 31st December 2013

Current cash $5.5 billion

Total current assets $13.2 billion

Total assets $15.6 billion

Liabilities (owed to suppliers) $1.6 billion

I got it from the article the thread is based on.

"While Nintendo's stock is presently taking a hit, the video game company has $8.6 billion banked in terms of cash and equivalents, and has no debt as of September 30, 2013."

Ultratwinkie:

chiefohara:
8.6 billion in the bank!?

300 million loss over the Wii U.... Chump change.

Can't say that Nintendo are too pleased at the founding family's timing in this affair however...

The PS4 costs billions to make. Just on R&D, licenses, and getting things running. Not counting the long term.

Same with xbox one.

If the Wii U doesn't get Nintendo its money, it won't have the money to make a new console. This shit gets exponentially expensive. You are forced to deal with AMD or Nvidia now. When the next gen comes around, they dictate what you get and for what price.

And they aren't cheap. Nvidia turned both Sony and MS away for not paying enough. These are huge companies. Only AMD went through with the deal, and that was because it was going bankrupt.

Why do you think investors wanted xbox to go away? Why would Sony abandon consoles if the ps4 didn't sell well?

Because its getting to the point that no one can afford to make consoles anymore. "billions" is chump change to these corporations. The only reason consoles exist now is to push other products the company is selling. or to help build consumer trust.

Its only big money to us, the peasants, working 5 days a week for 1/1000000000th of that these guys make.

Thanks for the clarification. I didn't know that.

Dexterity:

Should Nintendo fans be worried? With the way things have been swinging, recent developments might be a cause for concern

Way things have been swinging? Recent developments? Pretty much most of the recent articles you guys have made about Nintendo have been completely false.

The only one which wasn't complete bull was the article about Iwata saying "We haven't ruled out mobiles"

PedroSteckecilo:
That's the problem with a company grown accustomed to being super successful... just getting by is no longer enough for its shareholders, they've gotta be making mad bank or all that money helping keep the company afloat is going to go elsewhere.

Not that I think Nintendo "really" deserves to fail... but it seems like they are making some bad decisions...

No, the shares are just being sold over to Nintendo, nothing's happening to them.

From what I understand there's a LOT of tax involved with those shares so Yamauchi's family wants to avoid that so they're just selling them back to Nintendo because they don't have a lot of use for them. This really isn't something that's a cause for concern and it doesn't really affect us. I really don't get why people jump to conclusion over this

Kmadden2004:

Mr Ink 5000:

Kmadden2004:

snip.

hey, look at us, a couple of gamers being reasonable. who'd have thought it.

Shhhh, not so loud.

The fanboys hunt guys like us for sport...

;p

oh no, its You Sir Are Being Hunted, all over again.

Ultratwinkie:

chiefohara:
snip

The PS4 costs billions to make. Just on R&D, licenses, and getting things running. Not counting the long term.

Same with xbox one.

If the Wii U doesn't get Nintendo its money, it won't have the money to make a new console. This shit gets exponentially expensive. You are forced to deal with AMD or Nvidia now. When the next gen comes around, they dictate what you get and for what price.

And they aren't cheap. Nvidia turned both Sony and MS away for not paying enough. These are huge companies. Only AMD went through with the deal, and that was because it was going bankrupt.

Why do you think investors wanted xbox to go away? Why would Sony abandon consoles if the ps4 didn't sell well?

Because its getting to the point that no one can afford to make consoles anymore. "billions" is chump change to these corporations. The only reason consoles exist now is to push other products the company is selling. or to help build consumer trust.

Its only big money to us, the peasants, working 5 days a week for 1/1000000000th of that these guys make.

thats crazy, maybe these comapnaies need to get out of making multi media home entertainment devices, and start making consoles again

BigTuk:

Uhm.. here's the thing, why sell shares that pay dividends.

Oh I don't know.Maybe his family decided they just want a quick payoff.Maybe his family hate the videogame industry and want out of it.Maybe they're required to sell for legal reasons.We have absolutely no idea why they're selling but of course that's not going to stop the gaming media from spinning what appears to be a fairly mundane story in a negative light

I don't know enough about stocks, business, or the Yamauchi family to begin to infer what that means.

But it sure does look bad a marginally informed layman, like myself (and others).

MetalDooley:

BigTuk:

Uhm.. here's the thing, why sell shares that pay dividends.

Oh I don't know.Maybe his family decided they just want a quick payoff.Maybe his family hate the videogame industry and want out of it.Maybe they're required to sell for legal reasons.We have absolutely no idea why they're selling but of course that's not going to stop the gaming media from spinning what appears to be a fairly mundane story in a negative light

Well lets put it this way, if you heard Bill gates' family was selling of their shares in Microsoft... what would you think.

All your reasons are perfectly logical but again, the timing is somewhat suspicious and cause for speculation. No matter how you spin it, it boils down to Owners cashing in their chips now.

PedroSteckecilo:
That's the problem with a company grown accustomed to being super successful... just getting by is no longer enough for its shareholders, they've gotta be making mad bank or all that money helping keep the company afloat is going to go elsewhere.

Not that I think Nintendo "really" deserves to fail... but it seems like they are making some bad decisions...

They're not just getting by. They're posting losses for the first time in history, and have since had trouble moving their primary gaming device (which is being sold at a loss in the first place).

BigTuk:
[quote="MetalDooley" post="7.841320.20685880"]So basically this story boils down to..
Uhm.. here's the thing, why sell shares that pay dividends.

Wasn't there just a major hit on that front not too long ago?

BigTuk:
Well lets put it this way, if you heard Bill gates' family was selling of their shares in Microsoft... what would you think

Wouldn't think much of it at all honestly.I'd just assume that,like the Yamauchi family,there could be a myriad of reasons why they're selling up and it's not necessarily a negative one

All your reasons are perfectly logical but again, the timing is somewhat suspicious and cause for speculation. No matter how you spin it, it boils down to Owners cashing in their chips now.

And you could well turn out to be correct.However until we have definite information I'm not going to jump to negative conclusions which the games media seems only too eager to do when it comes to Nintendo these days

Dragonbums:
Honestly, it seems this is a whole butt load of overreaction. Or at the very least, new sites making it a huge fucking deal. I didn't see people scrambling to do this when Sony announced they lost $5 billion fucking dollars and both their headquarters at the initial launch of the PS3.

But everyone runs with their heads off? over a $300 million loss over the Wii U?

This is a pretty big deal. If anything, you should take it as an affirmation of Nintendo's status. It's still revered as THE game company that is solely a game company, thats a good thing. So when something bad is happening, people want to know whats up. It's just news. As to why nobody lost their shit with Sony, Sony has other things that it markets and posts profits on other products besides games.

It's something bad that has happened before to the dreamcast, so people draw parallels. Most people seem to indicate that Nintendo didn't know how to market it's console. They ended up pleasing nobody other than their loyal fans. The market has changed, and companies must adapt when that happens, Nintendo is no exception. Thing is, Iwata has already indicated they won't be changing that much. Not good considering his standing in the company and shouldering the blame.

They have tons of money in the bank, an absurd amount. They aren't going anywhere. But if they actually want to post profits the sizes they projected to their shareholders, something has got happen. No company is going to waltz in an knock off Nintendo. They're too big, but at the same time, they can't pretend that they aren't in competition with Sony or Microsoft anymore.

Dragonbums:
Honestly, it seems this is a whole butt load of overreaction. Or at the very least, new sites making it a huge fucking deal. I didn't see people scrambling to do this when Sony announced they lost $5 billion fucking dollars and both their headquarters at the initial launch of the PS3.

But everyone runs with their heads off? over a $300 million loss over the Wii U?

Insider activity (people who have 5% of the company or more) is actually a major key that investors watch when considering a stock. A group owning 10% or more of stock is absolutely worthy of being watched and the fact that they're heading to sell while the stock is low does not cast a positive light on their opinion of Nintendo's financials. For example, if the people who should be in the know buy more stock, wouldn't that give you confidence in buying more stock?

On the other hand, this would be and ideal time to sell even if you have faith in Nintendo. You sell now, it's likely to drop a hell of a lot more at the end of this fiscal year considering the dismal numbers they've been putting out, and then you just buy back in at a lower number. 10% ownership could become 15% ownership or more if played right. It isn't even insider trading since nearly everyone sees the bad numbers looming. This is actually an ideal time for Nintendo to buy outstanding shares. Buy while it's low.

If Sony had a single investor that owned this much of their stock want to sell, then hopefully they would report it. But frankly, Sony doesn't have a private owning family that is publically known. Nintendo does. Remember when Gates sold stock in Microsoft? That was in the news.

Sony losing $5billion was reported on. But after it was released, what's the point of releasing it again? Nintendo bet hard on something that is failing horribly. This is noteworthy and should be reported. Did you know that Nintendo's WiiU is the number 1 flop of 2013 in most finance circles? Even non-gaming sites notice a flop this epic. It's terrible that it's happening to the legend that is Nintendo. But I see no reason why news agencies should be silent about it for some unknown reason.

BigTuk:

Well lets put it this way, if you heard Bill gates' family was selling of their shares in Microsoft... what would you think.

All your reasons are perfectly logical but again, the timing is somewhat suspicious and cause for speculation. No matter how you spin it, it boils down to Owners cashing in their chips now.

Do I really have to point out that it's not "Bill Gates sells his shares", but "Bill Gate's many sons, whom just happen to have inherited his shares, split and sell theim back to Microsoft, which has enough money to buy them all in a whim".

Apparently I am the only one noticing that it's Nintendo itself buying the shares. That will increase the % of dividends from the remaining shares, if not the value itself (because after all the company has to expend the equivalent money to buy them out).

Qvar:

BigTuk:

Well lets put it this way, if you heard Bill gates' family was selling of their shares in Microsoft... what would you think.

All your reasons are perfectly logical but again, the timing is somewhat suspicious and cause for speculation. No matter how you spin it, it boils down to Owners cashing in their chips now.

Do I really have to point out that it's not "Bill Gates sells his shares", but "Bill Gate's many sons, whom just happen to have inherited his shares, split and sell theim back to Microsoft, which has enough money to buy them all in a whim".

Apparently I am the only one noticing that it's Nintendo itself buying the shares. That will increase the % of dividends from the remaining shares, if not the value itself (because after all the company has to expend the equivalent money to buy them out).

All that actually matters is that a group who owns over 10% of Nintendo is selling. That is news worthy just like Gate's plans to sell his Microsoft stocks over the next several years was also in the news back when it was learned. Imagine this phrase reworded to, "10% of investment capital withdrawn from MAJOR company". It's huge.

Nintendo buying it's own shares now is really smart. They've gone from over $40/share within the last five years to under $15/share. If they have a better future, that's brilliant. If they have a worse or similar future then it's depressing.

Dragonbums:
Honestly, it seems this is a whole butt load of overreaction. Or at the very least, new sites making it a huge fucking deal. I didn't see people scrambling to do this when Sony announced they lost $5 billion fucking dollars and both their headquarters at the initial launch of the PS3.

But everyone runs with their heads off? over a $300 million loss over the Wii U?

To be fair, Sony does more than just video games. They could also sell one of two of the dozens of film studios they own to eliminate their debt at this point. Nintendo doesn't have such options. Also, keep in mind that the $300 million loss is coming after the Wii started losing money at the tail end of its time in the previous generation.

Kmadden2004:

Mr Ink 5000:
could this possibly be due to legal reasons? The shares were only just signed over after various red tape, the family intended to sell anyway. just a thought

That sounds like the most likely reason behind this.

Can't report on stuff like that, it doesn't stir up enough bad press.

Galen Marek:

Kmadden2004:

Mr Ink 5000:
could this possibly be due to legal reasons? The shares were only just signed over after various red tape, the family intended to sell anyway. just a thought

That sounds like the most likely reason behind this.

Can't report on stuff like that, it doesn't stir up enough bad press.

What matters isn't so much the reason behind it. Having 10% of your investment capital walk out the door is news any way you look at it.

There are other reasons to sell now as well.

Good reason:
You (the investor) believe that Nintendo is going to have a bright future longterm but a shitty generation. So you sell now and buy back in at a lower price. The family could then own a significantly larger amount of Nintendo. If the price of shares halve, then they'd own closer to 16% of Nintendo for example.

Bad reason:
If you believe Nintendo is going to tank from here on out, then there's no time like the present to drop the stock.

Neutral reason:
You want money, not stock.

AzrealMaximillion:

Dragonbums:
Honestly, it seems this is a whole butt load of overreaction. Or at the very least, new sites making it a huge fucking deal. I didn't see people scrambling to do this when Sony announced they lost $5 billion fucking dollars and both their headquarters at the initial launch of the PS3.

But everyone runs with their heads off? over a $300 million loss over the Wii U?

To be fair, Sony does more than just video games. They could also sell one of two of the dozens of film studios they own to eliminate their debt at this point. Nintendo doesn't have such options. Also, keep in mind that the $300 million loss is coming after the Wii started losing money at the tail end of its time in the previous generation.

Just as an aside, Sony actually has enough cash on hand they could pay off their entire debt without selling anything. The doom and gloom bankruptcy criers are just retarded.

Yagami_Kira:

AzrealMaximillion:

Dragonbums:
Honestly, it seems this is a whole butt load of overreaction. Or at the very least, new sites making it a huge fucking deal. I didn't see people scrambling to do this when Sony announced they lost $5 billion fucking dollars and both their headquarters at the initial launch of the PS3.

But everyone runs with their heads off? over a $300 million loss over the Wii U?

To be fair, Sony does more than just video games. They could also sell one of two of the dozens of film studios they own to eliminate their debt at this point. Nintendo doesn't have such options. Also, keep in mind that the $300 million loss is coming after the Wii started losing money at the tail end of its time in the previous generation.

Just as an aside, Sony actually has enough cash on hand they could pay off their entire debt without selling anything. The doom and gloom bankruptcy criers are just retarded.

Okay, so why would Sony keep the debt around if they could pay it?

Why would they let their investors get hurt from this debt? By making stocks take a nose dive and harming investor wallets?

Why would they sell the entire farm if they could pay the debts? Why sell everything they have?

Its like getting paychecks from your high paying job and NOT paying the mortgage on your house which would leave you homeless. Just because you can.

That makes no sense, and requires a source to justify nonsensical business practices. Debt is not beneficial. It grows over time with interest. It hurts your stock. It hurts your investors.

Its a company's inherent job to not let that happen.

Ultratwinkie:

Yagami_Kira:

AzrealMaximillion:

To be fair, Sony does more than just video games. They could also sell one of two of the dozens of film studios they own to eliminate their debt at this point. Nintendo doesn't have such options. Also, keep in mind that the $300 million loss is coming after the Wii started losing money at the tail end of its time in the previous generation.

Just as an aside, Sony actually has enough cash on hand they could pay off their entire debt without selling anything. The doom and gloom bankruptcy criers are just retarded.

Okay, so why would Sony keep the debt around if they could pay it?

Why would they let their investors get hurt from this debt? By making stocks take a nose dive and harming investor wallets?

Why would they sell the entire farm if they could pay the debts? Why sell everything they have?

Its like getting paychecks from your high paying job and NOT paying the mortgage on your house which would leave you homeless. Just because you can.

That makes no sense, and requires a source to justify nonsensical business practices. Debt is not beneficial. It grows over time with interest. It hurts your stock. It hurts your investors.

Its a company's inherent job to not let that happen.

First debt interest is deductible, lowering their overall tax load. Second, its potentially a corporate strategy to keep a debt load so they aren't pressured to pay dividends. Sony keeps their debt load 1-2b lower than cash on hand at any given time. They have more debt than stock value, but they honestly don't care about their stock value. They're in a similar position to Google, where they can finance r&d and acquisitions almost purely on interest of their bank balance. They don't -need- to care about their stock. Right now they're cutting their chaff before it gets out of hand, but they arent in the dire straits some people think they are.

Ultratwinkie:
That makes no sense, and requires a source to justify nonsensical business practices. Debt is not beneficial. It grows over time with interest. It hurts your stock. It hurts your investors.

Its a company's inherent job to not let that happen.

I don't know one way or the other on whether or not Sony has the cash on hand but sometimes it is more strategic to pay off debt over time rather than all at once.

Debt does not necessarily grow over time. Hopefully they're at least paying the interest. Most loans to businesses require at least that be paid so that the principle doesn't increase.

I've seen some scenarios where the ability to write off debt payments offsets the interest fees in a way that encourages holding onto the debt or at least makes it less attractive to pay off immediately when combined with returns on investment on the cash being onhand. Imagine a scenario where your debt is ultra low in the interest department to the point where leaving cash in the bank in CDs or whatever actually nets you an extra percent back more than the debt costs you. Why pay back the debt?

I have debt that's in the ultra low 3.5% APR range. It is the absolute lowest priority on my mind with my personal investements having not made less than 4% since 2007-2008 and even that year was still around 1.5% return. I've had years where my investments hit 25% or more on return and I definitely don't have access to a finance department like Sony does. That's not to say I'm wealthy, percentages don't say anything about the amount of money invested but it does scale up. If I'd had millions of dollars to invest I'd still have made those percentages and so this relates to Sony directly. I'd imagine they could easily return 10% or more without any kind of concern.

Likewise, paying off the debt doesn't really do anything to the present situation. You'd just be decreasing the cash asset account while decreasing the liability account. On paper it'd be a net-0 change and instead of reporting a large debt you'd be reporting a large loss in the asset category.

Accounting is a hell of a thing. But Sony's problem wasn't the debt, it was the operating loss they took from a bad movie investment in addition to a few other things (some of them investing in the PS4 which is looking to be profitable almost immediately).

10% of their investment walks out? Ouch.

The move doesn't speak highly of future confidence in Nintendo's long term business.

In fact, it screams "NO CONFIDENCE IN CURRENT LEADERSHIP" to me. With Nintendo buying the shares back, it ensures a lower total of liquid capital for re-development, which they're going to need for sure within the next few years at least.

Which isn't to say they can't re-develop and turn their failing trend around...over 5 Billion in the bank is still a lot of money, but given what it cost M$ and Sony to develop their next-gen consoles AND the fact that Nintendo is running development costs for several (slow-working) Nintendo needs to spend very wisely in the next few years or pool their efforts with someone else.

Best thing that can happen is first party software over-performs enough to encourage investors to return on the cheap, while they re-develop or re-prioritize their flagship products (swap from home systems to handhelds).

 

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