Will This Ruling Doom Nintendo Stock?

Three Fools take to the Internet to review what the legal battle with Philips means for Nintendo stock.

Jun 29, 2014 at 8:00AM

Nintendo Wii U Hardware

Nintendo can't seem to catch a break with the Wii U. Credit: Nintendo.

A U.K. court has ruled that Nintendo (NASDAQOTH:NTDOY) is guilty of violating two of Koninklijke Philips' (NYSE:PHG) patents in the Wii and Wii U. Should investors sell Nintendo stock on the news? Or will the two parties settle their differences?

Guest host Alison Southwick puts these questions to Fool analysts Nathan Alderman and Tim Beyers in this  episode of 1-Up on Wall Street, The Motley Fool's Web show in which we talk about the big-money names behind your favorite movies, toys, video games, comics, and more.

Our Foolish colleague Leo Sun has the details of the ruling here. Nathan says the worst-case scenario has Nintendo paying steep licensing fees for every Wii and Wii U console sold in the past and going forward, a stark prospect when you consider that sales had largely stalled in the months leading up to the release of Mario Kart 8.

Tim says investors are right to be concerned but that it's also too early to sell Nintendo stock. Instead, watch to see if other world courts join in ruling against the company and, if so, whether those rulings lead to an injunction preventing further sales of Wii and Wii U consoles.

History suggests we won't reach that point. Rather, Tim says, we'll see the two companies settle on a cash payment and and cross-licensing of related patents. How big might the payout be? Nintendo had 795.22 billion yen in cash and short-term investments with no debt as of its March 2014 report. That's roughly equal to $7.7 billion in U.S. dollars. (Source: S&P Capital IQ.)

Now it's your turn. Click the video to watch as Alison puts Nathan and Tim on the spot, and then leave a comment to let us know your take on the ruling and Nintendo stock at current prices. You can also follow us on Twitter for more segments and regular geek news updates!

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Alison Southwick has no position in any stocks mentioned. Nathan Alderman owns shares of Apple. Tim Beyers owns shares of Apple, Google (A and C class), and Netflix. The Motley Fool recommends and owns shares of Apple, Google (A and C class), and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

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The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

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KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

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Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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