| VAMatt said: Ultimately, it means Ninty doesn't see a better use for their cash. |
Pretty much this. Nintendo has been highly profitable recently, so they have cash in their coffers. What do you do with (lots of) cash lying around?
a) Put it into your bank account. With interests pretty much at 0%, that's not a good idea.
b) Invest it, either real estate or stock market. N isn't exactly a real estate company, so the stock market it is. They can either buy "foreign" stock or their own. In the second case, they get dividends at years end as a bonus. If the stock price goes down, the company's worth decreases, so less taxes. If the stock price goes up, more taxes but not to the point your increase in net worth is really "used up". (Also you can sell stock again at higher prices if you need money, and also the risk of an unfriendly takeover could be reduced).
