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Nintendo shares are up 120% thanks to Pokemon Go

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Presentation on theme: "Nintendo shares are up 120% thanks to Pokemon Go"— Presentation transcript:

1 Nintendo shares are up 120% thanks to Pokemon Go
Video Clip

2 Can anything stop the great Nintendo rally of 2016?
Nintendo shares had another banner day on Tuesday, surging more than 14% in Tokyo amid widespread mania over the company's sensational Pokemon Go game. The stock's performance following the release of the augmented reality game is staggering: Shares have risen by more than 120% since July 6, adding $23 billion to Nintendo (NTDOF)'s market value. The company is now worth $42.5 billion, more than Sony, Canon, Panasonic or Toshiba. Pokemon Go is a legitimate sensation -- ranking as the top free downloaded app on both Apple's App Store as well as Google's Play store for Android devices. Investors are hoping that Nintendo will be able to cash in on the purchase of add-on features for the game. It's a model that many mobile game developers use. Make the game free for download, get them hooked and then sell extra items to enhance the game to generate big revenue.

3 Why would the Pokemon craze have such a positive effect on the value of Nintendo Company’s stock?

4 Nintendo shares plummet 18% after Pokemon Go reality check
Shares in Nintendo plummeted 18% on Monday after the legendary gaming company told investors that Pokemon Go will have only a "limited" effect on its bottom line. Why? Nintendo isn't the only company with a stake in the hit augmented reality game, and it might be earning a smaller share of game profits than investors had expected. Pokemon Go was actually developed and distributed by a company called Niantic. Both Nintendo and The Pokemon Company, one of its subsidiaries, have invested in the privately-held Niantic. The three companies collaborated on the game. But Niantic has other investors that stand to profit, including Google. Nintendo also owns 32% of The Pokemon Company, which controls the merchandising and licensing of the Pokemon franchise. The subsidiary will receive a licensing fee as well as payment "for collaboration in the development and operations" of the game. Investors had hoped these sources would add up to a big financial boost for Nintendo. At one point following the game's release, company shares surged by more than 120%, adding $23 billion to Nintendo's market value. The stock has since returned to earth, and shares are now up a more modest 60% from July 6.

5 Choosing Stocks Essential Question: How can stock ownership and trading create wealth for individuals?

6 Investors can profit from stock ownership through capital gains and dividends.
Capital Gain - profit made when an investor “buys low and sells high”. A capital loss is incurred when the stock is sold for less than it was purchased. Dividend - a distribution of a portion of a company's earnings, decided by the board of directors, to its shareholders. The dividend is usually expressed in terms of the dollar amount per share.

7 The stock market can be very volatile.

8 The stock market can be very volatile.
Volatility – changing rapidly from one condition to another

9 Stock prices often change due to speculation.

10 Stock prices often change due to speculation.
Speculation – to buy or sell when there is a large risk, with the hope of making a profit from future price changes

11 Impact of Positive News Impact of Negative News
D2 D1 D1 D2 V1 V2 V1 V2

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14 What is a “Day Trader”?

15 1. 2. In one complete sentence, what point is each cartoon attempting to make about online trading/day trading? 4. 3.

16 1. 2. 4. 3.

17 Summarizer: Word Splash Use each of the words below in sentence and paragraph form. Underline each word as you use it. Begin your summarizer with the following statement. Speculation Capital Gain Volatile Risk Dividend Supply Demand

18 Some people buy stocks because of the regular dividends that some corporations pay to shareholders. Others hope to “buy low and sell high”, earning a capital gain. However, buying stocks can be risky because stock prices can be very volatile. Stock prices are determined by speculation. Good news about a company leads to an increase in demand as investors attempt to buy shares. However, at the same time there is a decrease in supply, as those who already own the stock become less willing to sell. This increase in demand and decrease in supply leads to a higher price. Negative news has the opposite effect, causing an increase in supply but less demand. Negative news, therefore, leads to lower stock prices.


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