Tech

Tim Culpan is a technology columnist for Bloomberg Gadfly. He previously covered technology for Bloomberg News.

David Fickling is a Bloomberg Gadfly columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.

You may have heard that something amazing is going on at Nintendo.

The excitement is breathtaking and people can't stop themselves from constantly checking their scores minute by minute.

Hidden Levels
Nintendo shares were pretty boring for years. And then they weren't
Source: Bloomberg

We're talking less about the schoolkids and grandparents chasing fictional cartoon characters around their neighborhoods, and more about the hordes of traders and hedgies buying and selling the Japanese company's shares. 

Super Jump
The value of shares traded in Nintendo has soared in the era of Pokemon Go and Super Mario Run
Source: Bloomberg

On July 15, as Pokemon Go was starting its rollout in Europe, the value of Nintendo shares traded hit 476 billion yen ($4.7 billion), the highest daily turnover for any stock on the Topix index so far this century.

A week later, when Japanese players started collecting Squirtles, the 726 billion yen changing hands accounted for 30 percent of the total turnover on the Topix index, according to data compiled by Bloomberg.

At present, Nintendo is the most volatile large-cap stock in the world whose price has been rising

Power-Up
Nintendo is the most volatile large-cap stock globally that's risen in value over the past three months
Source: Bloomberg
Note: Excludes companies whose stock has fallen over the past 90 days and those with market capitalization below $10 billion. Price changes and volatility both measured in local-currency terms.

This is a good market for short-sellers to play in, too. Thanks to those massive volumes, it's trivially easy to trade your way out of a short position if the market turns against you. The record number of shares sold short this year -- 1.25 million -- is equivalent to just an hour's typical trading volume. Thursday's frenzy turned over that amount of stock within two minutes of the open.

For most things -- rockets, for example -- volatility isn't a good thing. In securities trading though, volatility is just another word for opportunity. And while we've been very skeptical about Nintendo's ability to turn the Pokemon Go frenzy into a cash cow, and have doubts as to whether Super Mario Run is worth Wednesday's 29 percent pop in the U.S.-traded ADRs, we're quite sure that in the zero-sum game of equities trading, somebody is making coin.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

  1. We've excluded companies whose shares have fallen over the past 90 days and those with market capitalization below $10 billion. The measurement is of 90-day annualized intraday volatility, in local-currency terms.

To contact the authors of this story:
Tim Culpan in Taipei at tculpan1@bloomberg.net
David Fickling in Sydney at dfickling@bloomberg.net

To contact the editor responsible for this story:
Paul Sillitoe at psillitoe@bloomberg.net