Not so mighty today. NTDOY.PK's amazing run, from $26 in early December to an all-time high of $52.95 yesterday, may have hit a wall. The stock is trading in the $50 range today, its first pullback since June 29.
Yes, it was time for a breather, though Nintendo isn't resting on its laurels by any means. At the E3 trade show, the Co showed off its Balance Board for the Wii.
The Co's approach has been progressive in reeling in non-gamers, stretching boundaries with new Wii and DS games. Toys like the Wii Wheel (for Wii Remote) will still pander to the core Nintendo audience, and the Co is going to make inroads with online play. Finally. Even with all this development, investors are feeling a bit rejected, given the Heisman. For all the love given Nintendo, it may be unrequited. Why?
The Co said yesterday that it will not increase production enough to meet insatiable demand for the Wii. Not now. Not in Christmas season. In Michelle Steele's video report for Forbes.com, Nintendo vice-president of marketing George Harrison assured fans that the Co is doing its best to build more Wiis.
"We are making more. Slowly, month by month, we're increasing production. It's just the unprecedented demand that was hard for us to really, to anticipate," Harrison told Forbes. "You never quite know until you introduce a product into the marketplace, and it does take some time for the suppliers to ramp up not only the parts, but also the actual assembly of the products, which are all made in China."
That comment is fair enough, but it has me wondering, why can't production expand? Aren't there enough viable workers who can be trained to increase production significantly between now and Christmas? Isn't this China we're talking about, the land of 2 billion people? There are so many addicted gamers in China that the offer of a free Wii (and games) through a job with Nintendo would be the ultimate.
As for the stock, it's possible that today's pullback is an indication that the run is done, that NTDOY will trade sideways from here. After all, the stock has doubled in just eight months because of the Wii's explosion. If Wii sales have hit a ceiling, the stock should follow.
Still a good Co to be in. Just not the right time. Too bad. Though I liked NTDOY since $36, I didn't get in until yesterday with a few shares.
Disclaimer: Pupule Paul is a little long NTDOY.PK.
1 comment:
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