Pokemon catch 'em all but not the stock

You can't escape Pokemon Go its everywhere. Since its release on July the 6th (Australia and US were the first) it has already become the most successful mobile game of all time. Nintendo shares are up 93% since then with a market value of $37 billion. To put this in context Activision Blizzard the maker of Warcraft and Call of Duty is worth $31 billion. Pokemon Go is attracting traders to Nintendo according to Bloomberg on Friday $4.5 billion shares traded the biggest daily turnover for any company in Japan's Topix index this century. 

 

Some of the increase is justified as investors extrapolate Pokemon success to other franchisees like Mario and Zelda. The only problem is its hard to live up to these expectations. Nintendo has a historically volatile share price great expectations led to slight disappointments and the realisation they have to bring out a hit product all over again. As a reminder they only own 32% of Pokemon Co and the game was released by Niantic (Nintendo owns a stake) whose augmented reality technology helped the game become a hit. It's good to see a game where users are active similar to Wii Fit which led to a similar rise below but expectations again brought Nintendo back. There is a reason traders are trading the stock long term returns in Nintendo have been average. Surprisingly Pokemon hasn't been released yet in Japan I suspect once Pokemon Go does comes out in Japan trading and the stock will settle down. 

Note Decisive has no position in Nintendo (7974). The material in this article is for informational purposes only and in no way constitutes a solicitation of business or investment advice. The material has been prepared without regard to any client's or other person's investment objectives. Before making an investment decision you should consider the assistance of a financial adviser and whether any investment or service is appropriate in light of your particular investment needs.