Nintendo, following their Q3 financial reports, intends to buy back 10 million of their own shares. As a publicly traded company, the investors are looking to nearly double the amount in Nintendo’s treasury from about 13 million shares to 23 million. This deal is slated to happen by March 31st according to their Notification of Acquisition. According to current yen to US ratio, this buy back would settle more than $1.2 billion in stock.
Nintendo has stated that the reason behind this is “[to] improve capital efficency as a flexible capital policy in accordance with changes in the business environment.”
From what I understand, a company buy back of shares is a fairly common thing. In doing so, the company is taking some of it’s own shares off the market to elevate the price of it’s current stock. Additionally, a company generally makes these moves when they believe they are in a low point, financially and may want to increase the market share associated with the current own stocks.
What does this mean for Nintendo? My guess is they are trying to (smartly) make a small grab for control. By buying this stock, they have more control over how they manage (as composed to the interest of the share holders)–further, they are making a bet that sales will be improving. Their stock will necessarily be worth more after, and with a hpefully successful 2014, Nintendo will have more money in the Mario vault.