How to buy, sell and short Nintendo shares

How to buy and invest Nintendo shares

There are two ways to buy Nintendo shares with IG. You can use share dealing to buy and own physical Nintendo shares – and receive possible dividend payments from the company. Or, you can use derivatives such as spread bets and CFDs to speculate on the company’s share price without owning the underlying stocks. Follow these steps to invest in or trade Nintendo shares:

You can read more about the difference between trading and investing in this article

You can read more about the difference between trading and investing in this article

How much would it cost to invest in Nintendo?

IG’s US best commission rate is available to active clients who placed three or more trades in the previous month. You can also speculate on the Nintendo share price without taking ownership of the shares using derivates. You’ll be able to:

• Get full exposure with a small deposit – usually 20%-25%of the full value of the trade¹
• Spread bet without paying any tax²
• Offset your CFD losses against profits for tax purposes

How to sell and short Nintendo shares

If you’re thinking about selling your Nintendo shares to realise a profit (or to avoid a further loss), there are two ways to do it. It depends on whether you own the shares or if you simply want to speculate on downward share price movements by going short. Follow these steps to sell or short Nintendo shares:

Nintendo’s live market prices

Trading Nintendo with CFDs

When trading CFDs (contracts for difference), you agree to exchange the difference in the price of Nintendo shares from when you open your position to when you close it. To go long on Nintendo shares, you would ‘buy’ the market. To go short on Nintendo shares, you would ‘sell’ the market.

Spread betting on Nintendo

When spread betting on Nintendo shares, you’re betting an amount of money per point on whether the share price will go up or down. If the market moves in your predicted direction, you’ll make a profit and if it moves against you, you’ll incur a loss.

Understanding Nintendo: a brief history

Nintendo, originally called Nintendo Koppai, was founded as a Japanese playing card company in 1889. The business created and sold cards for more than 40 years before it started dabbling in toy production. In 1933, the first joint venture between Nintendo and a distribution company was established.

Fast-forward a few years to 1962, when Nintendo listed on the Osaka Stock Exchange. Using the newly-injected capital, Nintendo started exploring possibilities including a taxi company, food chain and hotel business – all of which failed. A mere two years later, the playing card business reached its saturation point and Nintendo’s share price took a fall.

In 1966, the company started to develop electronic toys and eight years later Nintendo secured the rights to distribute the first commercially available video game console. Nintendo was gaining popularity until 1983, when a massive influx of competing games and consoles caused the video game market to fall in value.

In the early 90s, Nintendo’s market share was slashed by around 90% when Sega won the favour of consumers – especially in the US. Then, by 1995, Sony introduced the PlayStation and both Nintendo and Sega’s market share were affected.

Many more games and consoles were released between the mid-90s and early 2000s, including the popular Wii console. However, the Nintendo share price remained quite flat. It was only when the company started moving into mobile in 2015 that the share price took off.

Nintendo shares: the basics

Nintendo shares are listed on the Tokyo Stock Exchange (TSE) under the ticker symbol 7974. It also has a secondary listing on the NASDAQ (US Tech 100 with IG).

In recent years, the share price has increased quite drastically – from just over $11 in January 2015, to more than $43 in October 2019. This could be attributed to its announcement in March 2015 to move into mobile gaming, shortly after which the share price jumped by 27%. However, it wasn’t until the launch of Pokémon Go in July 2016 that prices really rocketed, boosting Nintendo’s market capitalisation by around $10 billion.

Nintendo’s success is not only driven by sales, but also by market hype around its products. In June 2019, Nintendo’s share price fell 3.53% after it announced a delay in launching the popular Animal Crossing game. This caused the company to lose an enormous $1 billion in market value.

The company is also pursuing other opportunities, such as movies and an amusement park. Its Super Mario Bros film is said to be released in 2022, and Super Nintendo World theme park will open in Japan in 2020. The aim of these opportunities is to market the brand to a wider audience, but Nintendo will still rely on sales to drive growth.

Nintendo key personnel: who manages the company?

The following people are on Nintendo’s executive team:

What is Nintendo’s business model?

Nintendo’s business model is built on creating and selling consumer electronics and video games. Nintendo designs consoles, games and accessories, including the popular Wii console, as well as Pokémon and Mario games.

Though users can buy games when they purchase a console, they can also download games when they set up their online Nintendo account. This means lower distribution costs for the business. Only compatible, licensed games can be used on a Nintendo console.

Nintendo fundamental analysis: how to analyse the share price

To analyse Nintendo’s share price, you should conduct thorough fundamental analysis. The business’s fundamentals will include various factors that affect its operations, such as financial performance and changes to the executive team. However, you cannot view company information in isolation. You should also investigate the health of the sector in which Nintendo operates and that of the overall economy.

As part of examining the inherent value of Nintendo shares, you can use various metrics. You can use the earnings per share (EPS), price-to-earnings ratio (P/E), the return on equity (ROE) and the dividend yield, among others.

• EPS can help you to establish if the business is profitable. Divide Nintendo’s profit by the number of outstanding shares to calculate its EPS
• P/E ratio defines how much you must spend on shares to make $1 in profit. Divide Nintendo’s market value per share by its EPS to calculate its P/E ratio
• ROE measures how much income the company makes from its assets compared to shareholder investments. Divide Nintendo’s net income by stakeholder equity to calculate its ROE
• Dividend yield depicts annual dividends compared to share price. Divide Nintendo’s dividend amount by the share price and multiply it by 100 to calculate its dividend yield

To accurately analyse Nintendo’s share price, you’ll need more information on fundamental analysis. Find it here.

¹ Deposits for leveraged trades are 20-25% on 99.77% of tier one US shares.
² Tax laws are subject to change and depend on individual circumstances. Tax law may differ in a jurisdiction other than the UK.