| heruamon said: So, using hte yen argument, nintendo's report should have a similar effect? |
It would not be unexpected:
http://seekingalpha.com/article/102649-shareholders-await-nintendo-forecast
A large part of the forecast growth in net income occurred because Nintendo management revised expected exchange rates to 105 yen per U.S. dollar from 100 and to 160 yen per euro from 155. As of today the actual rates are 97 yen per dollar and 125 yen per euro.
The surging value of the yen and the rapidly deteriorating economic conditions spell trouble for Nintendo. Shareholders now need to hope that Nintendo has not lost money by investing its cash hoard in any financial instruments that have collapsed in value.
The recent collapse in the price of Nintendo stock to 22,000 yen on October 28th strongly suggests that shareholders need to brace themselves. The stock reached a high of 73,200 yen on November 1, 2007; therefore, it has fallen 70%.
However, Nintendo *should* be insulated with less exposure in the finance department and a smaller reliance on exports (66% of Nintendo's business versus 75% of SONY's). No way to really know until the financials are available.
In both cases however, it's notable that much of the downturn in the fortunes of these companies is due to falling corporate investments and the strengthening yen, and not a reflection of the product lines. Both companies are still profitable.
//tongue in cheek
Waahh, we only made 2 Billion instead of 3 Billion because of the exchange rate!!!
