OceanJ on 11 January 2013
| Soleron said: Why is there a discrepancy between the movement of 7974 and the US ADR? |
Here's the basic relationship.
The U.S. ADR is worth 1/8th of an ordinary Nintendo Share. To see how this works:
One ordinary 7974 share is at, say 9000 Yen/Share. At today's exchange-rates of about 88 Yen/Dollar, that's $102.27. But now you have to divide that by 8, to get the value of U.S. NTDOY shares.
So at 9000 Yen for a 7974 share, you should see the ADR translate to $12.78 / share with an exchange rate of 88 Yen/Dollar.
Basically ADR's are held by a bank and even though they are subject to supply and demand, like any stock on the NYSE or NASDAQ - there is an arbitrager that eventually adjusts the prices to align with current exchange-rates.
This balancing act accounts for the % movement discrepancies.
