24/7 Wall St.

Sometimes it can feel a bit dangerous stepping in front of a massive trend and fad. Even pointing out the risks or caution when compared to the past often cannot be relevant. It turns out that perhaps the Pokémon Go craze may have been built up too much when it comes to Nintendo.

After having seen the U.S.-listed over the counter (OTC) shares more than double from its investment into Pokémon after the recent launch of the Pokémon Go game, the shares were crushed in Japan on Monday. Its shares fell a sharp 18%, after having been limit-down by 15% in Tokyo.

The driving force here is that Nintendo said that the financial impact from Pokémon Go would be limited. That doesn’t sound very exciting for a company in which the shares had more than doubled. Again, Nintendo invested in the company Niantic, but it does not actually make the game, and Nintendo is not the only who benefits from the growth of the game as such.

24/7 Wall St. pointed out the Pokémon Go stocks that rose along with the game and wanted to see if the major run-ups had gone too far or if it was a return to the 1990s, when the gains took place in staggered waves.

Nintendo’s OTC shares were trading closer to $17 at the start of July. That was just days before the Pokémon Go craze took off. By July 18, they had a high close of $37.37, and they closed at $29.00 on Friday before the market selling in Japan.

What Nintendo investors, and the investors who are chasing the secondary winners, need to consider is that its financial interest is 32% of Pokémon. As such, Nintendo’s real life issue is that Pokémon Go’s impact was not creating the need for Nintendo to modify its consolidated financial forecasts for the accounting treatment of the income.