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Nintendo (NTDOY) announces new $300 million share buy back

Nintendo announced a new share repurchase program today in Japan. Find out more about the $300 million buy back.

Asif Khan

February 22, 2019 1:05 AM

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Nintendo has a history of returning cash to shareholders. This mainly occurs through dividend payments, but today the company's board of directors has authorized a $300 million share repurchase program. The buy back authorizes up to one million shares to be bought. This decision from the board of directors comes less than a day after Nintendo shares spiked during U.S. trading. 

I alerted Shacknews readers about this spike in Nintendo's stock on unusually high volume earlier in the day. Over $10 million worth of Nintendo (NTDOY) shares traded in a fifteen minute period. This amount is certainly dwarfed by Nintendo's $300 million buyback which will take place between March and April. The company will be buying these shares on the Tokyo Stock Exchange. This repurchase program could potentially shrink the outstanding shares by 0.83%.

Nintendo also announced that they will be cancelling 10 million shares of treasury stock. This reduces the number of shares outstanding to 131,669,000 after cancellation. The majority of these shares were bought from the estate of Hiroshi Yamauchi at a much lower price than the stock trades today. 

Nintendo fans, Reggie has a message for all of you. Please take a look. pic.twitter.com/EAhaEl5oEJ

— Nintendo of America (@NintendoAmerica) February 21, 2019

Nintendo has had a very interesting day with the retirement of Nintendo of America President Reggie Fils-Aime sending shockwaves across the gaming world. The company finds itself in solid financial shape, and is putting their money where their mouth is. Clearly the board of directors sees value in Nintendo's stock, and this buy back comes at a time where the stock finds itself down over $20/share from its 2018 trading high. 

Nintendo just announced it will buy back shares worth US$298 million (0.83% of Nintendo).

Yesterday, $NTDOY in the US popped 4.77%.

Isn't this the most obvious insider trading possible?

— Dr. Serkan Toto (Kantan Games Inc.) (@serkantoto) February 22, 2019

One does have to wonder if the set of trades that occurred during U.S. trading were the restult of insider trading, but either way Nintendo's board is finally stepping up and making their voices heard that they believe the stock is worth buying at these current levels. Buy backs do not always work, but Nintendo has shown the ability to execute these returns of capital to shareholders in a very opportunistic manner. 

Full Disclosure:

At the time of this article, Asif A. Khan, his family members, and his company Virtue LLC had the following positions:

Long Nintendo via NTDOY shares

Asif Khan

CEO/EIC/EIEIO

Asif Khan is the CEO, EIC, and majority shareholder of Shacknews. He began his career in video game journalism as a freelancer in 2001 for Tendobox.com. Asif is a CPA and was formerly an investment adviser representative. After much success in his own personal investments, he retired from his day job in financial services and is currently focused on new private investments. His favorite PC game of all time is Duke Nukem 3D, and he is an unapologetic fan of most things Nintendo. Asif first frequented the Shack when it was sCary's Shugashack to find all things Quake. When he is not immersed in investments or gaming he is a purveyor of fine electronic music. Asif also has an irrational love of Cleveland sports.