- Cathie Wood’s flagship fund has shed most of its Nintendo stake ahead of the new Switch console release.
- The Ark Innovation ETF now holds about 1,500 ADRs worth $82,000 in the Japanese gaming powerhouse.
- Analysts haven’t been bullish on Nintendo, saying rival consoles will likely outshine the Switch update.
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The star stock-picker began to shed her stake in Nintendo in July, around the time the company tweeted it would introduce the OLED Switch update this month but had “no plans for launching any other model at this time.”
The Ark Innovation ETF now holds a tiny stake of 1,500 American Depositary Receipts in Nintendo worth about $82,000, according to data on Ark’s website.
That holding is a steep drop from the more than 4.7 million shares held by ARKK at the end of February, when Nintendo’s US-listed ADRs hit a price peak this year. The stock has dropped 32% year-to-date, and was last trading at $54.60 per share.
Nintendo’s new device, which comes with a $350 price tag, has a larger 7-inch OLED screen. But a hotly anticipated upgrade to its console’s graphics – 4K display capabilities that match rivals from Microsoft and Sony – is missing. This has disappointed some fans.
Also, analysts haven’t been too bullish on the stock, with Wedbush saying the next set of positive catalysts for Nintendo beyond the Switch may prove to be elusive.
“The Switch is likely entering its post-peak years as competition ramps up, and Nintendo has raised concerns about supply constraints,” Wedbush analysts Michael Pachter, Nick McKay, and Junaid Zubair said in a recent note.
“The scale of the Switch OLED model rollout remains unclear, and Nintendo has indicated that it does not have any plans for launching other Switch models beyond the OLED model at the moment,” they said, adding that this seemingly rules out a device with 4K resolution in the near future.
Wood, whose investing strategy focuses on “disruptive innovation,” has also been dumping Tesla stock. Three of Ark Investment Management’s ETFs offloaded $270 million worth of the electric-vehicle maker’s shares late last month. But all three still count Tesla among their top holdings.
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