Can Nintendo Investors make NIntendo acquire a studio?

[mjk45]

JWeinCom said:

animegaming said:

Yeah Nintendo while certainly not being strap for cash and making a ton of money, wouldn't be afford to what MS just did and at best it would of been merger of both companies similar to Bandai and Namco, Koei and Tecmo, or Squaresoft and Enix rather Nintendo buying Bethesda.

Hell Sony's market cap is pretty close to Nintendo's, so I am not even sure if they could have made a move like this either.

Well... Nintendo could. It's not like they'd go out of business if they it didn't work out, but taking that big of a gamble would probably make stockholders antsy, and if it didn't work out, there'd be major structural changes at the company. Whereas with Microsoft, they it probably won't even be the most significant thing in the company by a long shot. Sony on the other hand probably couldn't in any realistic sense.

Sony's market cap is I think something like 30 billion above Nintendo's... But that's largely based on predictions for the future.

Sony has a lot more assets than Nintendo does. Like... A LOT. But a lot of that is not in short term assets.

In terms of short term assets (cash or stuff that can become cash quickly), Nintendo has about 15 billion. Sony has about 54 billion.

But while Nintendo is basically debt free, Sony is not. They have about 46 billion in short term liabilities (debt that needs to be paid soonish). 

So... If Nintendo paid 7.5 billion for Bethesda, they'd still just be 7.5 billion dollars poorer. They'd still have enough money to do what they need to do. If Sony did the same, they'd be be left pretty strapped. They'd still be able to pay whatever they needed to in the near term, but they'd only have about 500,000,000 left to launch the PS5, fund development, pay life insurance, and whatever else they do as a company. They wouldn't have much of a cushion to fall back on if something went wrong, and they'd be in debt as a company if it didn't work out, which is generally not a good thing. Especially since Sony's been doing a good job digging themselves out of a hole recently, I don't think they'd do that.

If you don't eat your reserves it comes down to your capacity to borrow, so Sony and Nintendo would be fine plus market cap isn't the be all and end all of a company's worth , the market now tends to downgrade what it sees as conglomerates and they are quite often capped at way less value than what the the sum of their parts and profitability would suggest, that's why Sony now is valued at nearly a third of what it was when  valued at 200 billion, and analysts say that conglomerate stock downgrading is why despite a turn around that has produced record profits over the S200 billion version Sony's market cap isn't being met with the same type of rise that other stocks show.

Last edited by mjk45 - on 22 September 2020