Screenshot : Nintendo ( Super Mario Odyssey )

Earlier today, Nintendo’s quarterly earnings report showed mixed signals; operating profits were up, but Switch sales and software attach rates were down. That all must have meant something to the Wall Street investor who gambled hundreds of millions on the assumption that the video game giant is about to hit a major snag in the road.




Yesterday, Bloomberg reported that Gabriel Plotkin, the head of a New York hedge fund called Melvin Capital Management, had made a $400 million bet that Nintendo’s future doesn’t look too bright. This technique is called “shorting,” and it refers to someone borrowing stock and selling it at the existing market price under the assumption that, weeks or months down the road, the stock will have fallen and then can be bought back at a much lower cost.

Nintendo’s stock has been in a rough place ever since E3, dropping 16% between the start of June and the end of the show two weeks later. Traders apparently weren’t impressed by the the fact that Fortnite had arrived on Switch and the new Super Smash Bros. would include every character in the series’ history. But a slump in share prices is far from the $400 million gamble Plotkin’s made. What does he know that we don’t, huh?


Screenshot : Nintendo ( Mii Plaza Stock Exchange

Plotkin declined to explain his theory on why he expects Nintendo to stumble in the near future, but we at Kotaku are longtime observers of the company through all its wondrous and head-scratching phases, so we have some ideas of our own:

