In case you’ve been living under a rock this week, Pokemon Go has been a huge hit for Nintendo Co. Ltd (OTCMKTS:NTDOY) and its shareholders.
That’s why it may come as a surprise that I have three good reasons to sell NTDOY stock immediately.
NTDOY Stock Now Has Sky-High Expectations
NTDOY stock has spiked an incredible 50% since July 1, presumably entirely based on the popularity of Pokemon Go. So why sell now when the game was only recently released?
The easy money has already been made.
The reason for the huge spike in share price is because the market was not anticipating Pokemon Go’s massive success. Now it is. If you happened to own Nintendo stock ahead of the big move, now is the perfect time to cash in on some impressive gains.
If you missed the move, buying a stock that is up 50% in a matter of weeks is a dangerous move.
How high are expectations? It’s impressive that Pokemon Go daily turnover on the first day of its launch was 400 million to 500 million yen. But Morgan Stanley analyst Mia Nagasaka says the app will have to hit a minimum of 15 billion to 20 billion yen per month for an extended period of time to have a “meaningful” impact on NTDOY’s earnings.
“Given particular characteristics of apps, at this point, we cannot comment with high certainty on [its] sustainability,” Nagasaka added.
NTDOY Only Gets a Fraction of Pokemon Go’s Profits
Based on the way that Pokemon Go’s success has been reported in the media, casual observers may believe…
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