“A stock split would damage the premium value Nintendo stock currently holds.”
☆ NintendObs Event – Nintendo’s 2015 Annual General Meeting of Shareholders.
Question:
I would like you to decrease the current number of shares constituting one unit of stock from 100 shares to 10 or 20. I feel that 100 shares per unit are a little too costly. There has been such a request for a long time and you mentioned that you would start considering it after the digitalization of stock certificates. Are you considering reducing the investment unit to a level which is reasonable to ordinary investors?
Answer:
Iwata:
In past annual general meetings of shareholders, we received comments that the minimum investment unit of Nintendo is too high and that a stock split or reduction of one stock unit would increase the number of shareholders and have a positive effect on the stock price as a consequence. We see it an issue to be considered. In accordance with a listing rule of the Tokyo Stock Exchange, we cannot change the current number of shares constituting one unit of Nintendo stock from 100 shares to one share or 10 shares, which was once allowed. In my view, the rule to standardize 100 shares as one unit of stock was established to avoid any confusion with the variety of one stock unit after various problems, including mistaken orders.
Therefore, a stock split is the only way for us to reduce the stock trading unit. Some people say that a stock split would work to broaden a company’s investor base and improve the liquidity of its stock, and it is a fact that some companies have achieved such goals. On the other hand, we have received some objections in past general meetings of shareholders and through investor relations inquiries that a stock split would damage the premium value Nintendo stock currently holds. We understand our shareholders have mixed reactions to it. On that premise, we hope to discuss carefully whether to split our stocks or not.
— The 75th Annual General Meeting of Shareholders
Source: Nintendo JP.
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