Nintendo conducts 10-for-1 stock split to lure new investors

Nintendo performed a 10 for 1 stock split that lowers the price of an individual stock. The 133-year-old Japanese gaming giant hopes the move will make it more affordable for a wider group of investors to buy the company’s shares.

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Nintendo conducted the previously announced 10-for-1 stock split Thursday, aimed at lowering the price of one individual share to attract new investors to the more-than-century-old Japanese gaming giant.

Prices for Nintendo’s stock reflected the split on the Japanese exchange’s website. Nintendo shares closed at 6,043 Japanese yen ($41.76) on Thursday, after closing at 59,700 on Wednesday.

Nintendo shares fell more than 1% in Asia Friday afternoon.

Each share of Nintendo common stock is split into 10 shares, hence the price reduction per share.

The move is intended to appeal to a wider group of investors. In Japan, investors are typically required to buy a block of 100 shares in one company. At Nintendo’s old stock price, that would cost at least 5.97 million Japanese yen, or just over $41,200. With the split, 100 shares would cost 604,300 Japanese yen or just over $4,170 at Thursday’s closing price, potentially making it more affordable for individuals to invest in Nintendo.

“That minimum investment of about 6 million yen is enough to allow a student to complete a full four-year program of study at a Japanese university,” Serkan Toto, CEO of Kantan Games, a Tokyo-based gaming consultancy, told CNBC.

“It was really time for Nintendo, as a consumer-oriented company with such strong brand awareness, to lower its share price.”

“Now Nintendo is more affordable, especially for younger people, a type of investor that has grown in Japan in recent years,” he added.

A number of major technology companies, including: Apple aand Amazon, have announced stock splits in recent years. While stock splits don’t fundamentally change the company in any way, they do make buying stock in the company cheaper.

The split comes at a testing moment for Nintendo, a 133-year-old company, amid broader challenges in the video game industry. In the second quarter of the year, Nintendo’s operating profit fell 15%, while sales of its flagship Switch game console also fell. The Japanese gaming giant faces challenges in its supply chain, hampering its ability to meet the demand for the Switch.

However, Nintendo games still appeal to a wide range of consumers. The company said this month that sales of Splatoon 3 in Japan surpassed 3.45 million units – a domestic record for all Nintendo Switch software within the first three days of sales. Splatoon 3 was launched on September 9.

Nintendo is also gearing up to release popular titles in the coming months, including a new game in the Pokemon franchise.

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