Nintendo has experienced a rather successful 18 months. In March 2017, the company released the Nintendo Switch which has set sales records and has been sold out all around the world. The Big N has also found success with sales of retro consoles such as the NES and SNES Classic Edition systems (smaller sized revamps of retro systems). With this in mind, it seems unusual that the company's stock price has just dropped dramatically.
According to a Bloomberg report, investors and analysts are said to be scrambling to figure out why the price of Nintendo stock just plummeted by more than 10% in just two days. The price of a Nintendo share slipped by 4% on Friday, June 1 before sliding another 6.3% on Monday, June 4. Not only is this the largest two-day decline for the company since December 2016, but it is also the lowest point for the stock price since September 2017, and is at the "biggest discount versus Wall Street targets in nearly a decade," says Bloomberg.
Concerningly for those with a vested, financial interest in the company being successful, people seem unable to figure out exactly why the stock price has dropped by such a large number. The Nintendo E3 2018 press conference will feature the likes of Super Smash Bros. For Nintendo Switch as well as several surprises. These announcements will surely renew interest in the company and its wares, also boosting sales and the returns on those stocks, so why has the price dropped instead of having risen?
Several possible reasons are being circulated for why would-be investors and current stakeholders just aren't that enthused. One of the reasons includes the fact that rumors that Fortnite is coming to Switch have already been circulating for quite some time. This means that any confirmation of the port that comes during E3 2018 will be met with far less hype than if it was a total surprise. Therefore, people will be talking about Nintendo less and may be less likely to buy the Switch.
The recent announcements of Super Smash Bros. For Switch and Pokemon Let's Go Pikachu and Eevee also won't have helped things. Analysts and investors have also raised concerns that Nintendo will be left with nothing in the tank for E3 2018, with all of its major reveals having happened already, outside of the industry event. It will be up to Nintendo to prove them wrong, restoring faith that it can sustain the success of the Switch and keep fans excited about its games.
Source: Bloomberg