ZEENAT MOORAD: The games people play
It’s far from game over for Nintendo and more about how it maintains momentum
Despite the company posting quarterly profit that topped estimates, all anyone can talk about is how New York hedge fund Melvin Capital Management is shorting Nintendo, the purveyor of childhood nostalgia. Last year, the Japanese gamemaker’s Switch system, which can be used at home or on the go, became one of the fastest-selling consoles in history. The firm’s annual profit rose 500% (yes, you read correctly), after it sold just over 15 million of the consoles. Then, in May this year, a sell-off began. No-one seemed to know exactly why; analysts and investors were equally baffled. Nintendo’s biggest bull on Wall Street, Jefferies’ Atul Goyal, blamed the drop on traders who rely on technical chart analysis to make investment decisions. "What is shocking is that recently there has been a lot of good news related to Nintendo. Nevertheless, if chartists are giving a diametrically opposite view, we take this as an opportunity to reassess and review," he said in a research note. Part of t...
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