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Since Pokemon GO launch, Market Cap of Nintendo Doubles to $42 Billion

Since Pokemon GO launch, Market Cap of Nintendo Doubles to $42 Billion
In just seven sessions since the mobile game Pokemon GO was launched in the United States, the market capitalization of the Japanese firm Nintendo Co was more than doubled to reach 4.5 trillion yen ($42.5 billion) as the shares of the company which released the Pokeman Go game to the world last week soared for another 14 percent on Tuesday.
Even some seasoned market players have been surprised by the massive buying in Nintendo shares that was triggered by the phenomenal success of Pokemon GO which is now available in 35 countries, the majority in Europe, and which was most recently launched in Canada.
"I've never seen the trend of such a big company's shares changing so quickly in such a short period of time," said Takashi Oba, senior strategist at Okasan Securities.
Bringing he gains of the company to more than 100 percent since the launch of the game on July 6, Nintendo shares ended Tuesday up 14.4 percent at 31,770 yen.
Surpassing the record for trading turnover in individual shares it set on Friday, of 476 billion yen, the turnover in Nintendo shares hit 703.6 billion yen.
Roughly a quarter of the entire trading on the Tokyo Stock Exchange's main board was comprised of the trading that was done in Nintendo shares only.
Hopes that Nintendo could capitalize on a line-up of popular characters ranging from Zelda to Super Mario to strengthen its new foray into augmented reality have been significantly boosted by the astounding success of Pokemon GO which was unforeseen even by its creators.
"Virtual reality and augmented reality have been a focus of the market but hardly anyone was expecting Nintendo in this area. Suddenly Nintendo has become an AR-related stock," said a fund manager at a Japanese asset management firm, who declined to be named as he is not allowed to discuss individual shares.
The big gains were justifiable considering the likely boost to Nintendo's bottom line, the fund manager said.
"Under my rough estimate, the sales from Pokemon GO and upcoming related gadgets will boost net profits by 50 billion yen. Based on that assumption, Nintendo is traded at 30 times profits, which is not unreasonable," he said.

An unexpected boom in some shares that have a scant link to the game has been produced by the popularity of Pokemon GO.
Simply due to the fact that a company sells "Pokemon Bread" among other breads wrapped with character-decorated bags, the shares in First Baking Co, a bakery firm with annual sales of 25 billion yen, saw its shares rise 18 percent on Tuesday.

Christopher J. Mitchell

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