For the second day in a row, Nintendo has had a massively big day on Wall Street.
The game publisher’s stock price is trading at around $23.30, which is up approximately 28 percent, or more than $5, compared to yesterday’s closing price of $18.22. Yesterday, investors raced to pick up the company’s stock from over-the-counter markets (often referred to as the “pink sheets”) after Nintendo announced a partnership to make mobile games with Japanese publisher DeNA. Today, however, the stock continues to rise thanks to investment bank Jefferies raising its rating on Nintendo to a “buy” status. This raises Nintendo’s market cap to $20.65 billion, which is up from around $16 billion yesterday.
“Finally, Nintendo has turned a corner and embraced a huge strategic shift, opening up its game-IP for smart devices,” Jefferies analyst Atul Goyal said. “We have long argued that it needs to change. Today, it entered into a business and capital alliance with DeNA. We believe Mario, Zelda, Pokémon, and Donkey Kong on smartphones and tablets will expand its market and profit pool dramatically.”
Jefferies also drastically raised its target price for Nintendo from $12.70, which it blew past yesterday, to $30.45.
Nintendo has long avoided putting its games on other company’s platforms. The publisher has seen its software as a way of selling its hardware, but it has struggled to make a profit the last few years. Investors have cried for Nintendo to embrace mobile, and now that’s finally a reality.
As part of the deal with DeNA, the two companies will release mobile-only games based on existing Nintendo franchises. No character or game is off-limits — although Nintendo doesn’t want to embrace certain business models common to mobile. Nintendo also said it will not port any of its existing games to phones or tablets.