Introduction
Nintendo stock continues to fall even without any clear negative news.
This is not abnormal. Rather typical movement.
Stock prices are not “facts”; Driven by “Changes in Expectations”.
Conclusion: 3 factors
The reason Nintendo's stock price is weak is simple.
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These three things are happening at the same time.
1. My expectations were too high
The stock price so far is
"Growing again with next-generation machines"
It was evaluated on that premise.
However, the current situation is
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In other words,
A state where only expectations were factored in first.
If those expectations waver even a little, Stock prices naturally fall.
2. Business performance slowdown has become a reality
The Nintendo Switch is entering a period of maturity.
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Most recently,
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The important thing here is that
"Weak as a result, not as a forecast."
The market is strongly pricing in this fact.
3. I can't see the next growth.
Stock prices look into the future.
But now,
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As a result,
"Blank period" is occurring.
During this period, ratings tend to decline.
Why hasn't the decline stopped?
What happens when these three things overlap?
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→ Weak reason to buy
In other words,
"There is some selling, but there is little buying"
This is the essence of never ending decline.
Current location from an investment perspective
The current situation can be summarized as follows.
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The important thing here is that
Company quality and stock price movements are two different things.
Next 6 months
Unstable in the short term.
Key point→ push down due to confirmation of deceleration Key point→ Difficult to rise
In other words,
The market is in a range with little sense of direction or is on the decline.
Next year
A lot can change in a year.
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Here,
Determined by stock price trends.
Scenario analysis
Bull case (35%) Details of the next generation machine have been clarified. Expectations were rebuilt and stock prices rebounded.
Base case (45%) Lack of information continues. Stock prices are flat to moderately declining.
Bare case (20%) Delays and poor performance. Ratings drop further.
Investment risk
Risk 1: Delays in next-generation devices Directly linked to the collapse of expectations.
Risk 2: Weak initial sales The growth story is denied.
Risk 3: Lack of software Profit recovery will be delayed.
Risk 4: Overall market deterioration The decline is accelerating due to the external environment.
Summary
The reason why Nintendo stock continues to fall is clear.
Key point Key point Key point't see the next growth
That is, currently
“Expectations Adjustment Phase”
The conditions for bottoming out are also clear.
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Until then,
This is not a phase to rush into.