EllensProphet on 08 November 2007
| skywalker2007 said: If dollar gets smashed, wouldn't that make NTDOY up because it is shown in US dollar ? For example if dollar/yen is trading at 1:1 (extreme example of weaken dollar), them wouldn't the value of NTDOY be 1/8 of 7974stock = 8000(64,000/8)? Either weak dollar or strong yen should be good for NTDOY. |
The problem for Nintendo is that a lot of their earnings are in dollars, but their expenses are in yen. So they pay 18000 yen for something and price it at at $250, expecting a 40% profit. But then the dollar goes down the toilet and the $250 only converts to 26000 yen, and their profit drops to 30%. That amounts to a 25% reduction in earnings from US sales. Hence in Japan on the TSE 7974 drops the full limit for the day, and any "gain" a US investor sees as the dollor drops is offset by 7974 loses priced in yen.
The urge to play is a terrible thing to waste.
