Betting against Nintendo is a fool’s game. Nintendo’s stock value has skyrocketed recently, which has left a man who bet $400 million against the Big N relatively red-faced and out of pocket. Nintendo stock surges saw the company’s value rise by 7 percent. This followed the news of Nintendo’s strong Q1 sales figures.
Gabriel Plotkin, a US Hedge Fund manager (Melvin Capital Management) placed a bet against Nintendo. He believed that Nintendo’s stock prices would continue to steadily decline. Plotkin short-sold his Nintendo stock, which would have made him considerable profit if he was right. His plan back-fired, however, and now Plotkin finds himself worse off by the princely sum of $27 million. This is, according to Bloomberg.
By borrowing and selling $400 million’s worth of Nintendo shares. Plotkin could have bought back his stock at a lower value, pocketing a cool profit in the meantime. Nintendo had other ideas, however. Thanks to the success of titles such as Mario Tennis Aces, Nintendo Labo, and Donkey Kong Country Tropical Freeze, Nintendo’s sales estimates were beaten well in advance. Plotkin was plotting to make some quick dollar, but found out the hard way to not take Nintendo lightly.
Despite the $27 million loss, Plotkin’s Melvin Capital management ought to do fine. The hedge fund is worth a staggering $7 billion. That’s just a few less ivory back-scratchers for Plotkin and pals. Jokes aside, $27 million is a hell of a lot of money to lose on a bet, no matter how you look at it. The latest advice from traders and analysts is to watch Nintendo more closely. Our advice? Don’t take the success of the Nintendo Switch lightly. The dinky hybrid console keeps performing and with games like Pokemon Let’s Go! and Super Smash Bros Ultimate on the way, we don’t see it slowing down any time soon.