Nintendo Considers Lowering Stock Trading Unit
Nintendo are considering dropping the minimum share purchasing amount in order to attract more buyers.
In Japan, companies sell their shares in “blocks” (trading units), meaning that if you want to buy one share in a company, you have to buy the minimum (similar to how we buy chips here in Australia since the GST dropped). Nintendo currently allow buyers to snap up shares in blocks of 100.
But the company are considering lowering this trading units to help entice smaller investors to get a slice of the company. Currently, Nintendo’s largest investors are banks and financial institutions.
Nintendo posted this message on their company website;
“Nintendo Co., Ltd. (the “Company”) believes a stock trading unit reduction is one of the effective measures to expand the investor base and enhance stock liquidity. However, among shareholders there are arguments for and against the reduction.
Therefore, taking into consideration aggregately the movement of the overall stock market, the level of the Company’s share price and liquidity of the Company’s shares, among other things, the Company will continue to carefully evaluate the feasibility of a stock trading unit reduction from various perspectives.”
This press release was reported incorrectly by some Western newspapers who thought it meant the company were considering a share buyback (others thought it was talking about a “stock split”).
While it’s not yet set in stone when, or if, Nintendo will lower that barrier, doing so could encourage more investors to help boost the company’s finances. Not that they really need it.