Nintendo’s stock has had a sharp decline after the expected inclusion in the Nikkei 225 did not happen. The Nikkei 225 is similar to America’s Dow Jones Industrial Average, which looks at the top 30 companies in America and their stock performance to help investors have a better understanding of market trends. The Nikkei 225 are companies on the Tokyo Stock Exchange that do the same.
Nintendo recently moved its listing from Osaka to Tokyo, probably for inclusion in the 225 list, but when this did not occur a 7.3% drop happened. This is the biggest drop the company has experienced in over 4 months. Tokyo analyst Takao Suzuki recently explained Nintendo’s exclusion from Nikkei:
“We believe Nintendo’s shares have been overvalued due to speculative demand, on the assumption that they would be included in the Nikkei. As this expectation has come to nothing, this appears to be the right time to sell.”
Time will tell if Nintendo will be able to bounce back from this stock freefall, but this is big news for investors.