ValueAct eyes stake of over $1.1 billion in Japanese gaming major Nintendo

ValueAct has picked up about 2.6 million shares, or about a 2% stake, in Nintendo. Shares of the Japanese company rose more than 2% as trading started in Tokyo.

Activist investor ValueAct Capital Partners LP has built a stake of over $1.1 billion in Nintendo, according to a letter seen by Reuters, a bet that digital software distribution and the development of new entertainment products will fuel growth at the Japanese gaming company.

ValueAct, which first began buying the stock in April 2019, grew the position in Nintendo, known for its gaming consoles and for having turned characters like Mario and Donkey Kong into international hits, during the stock market sell-off in February and March, according to the letter sent to its investors.

Nintendo's future is bright, ValueAct wrote in its letter, adding there is potential for growth both in the software business and room for the company to transform itself into a broader entertainment company.

ValueAct has picked up about 2.6 million shares, or about a 2% stake, in Nintendo. Shares of the Japanese company rose more than 2% as trading started in Tokyo.

"We are aware that ValueAct is holding a stake and we've been engaged in dialogue with them. We don't disclose content of our dialogue with our investors," a Nintendo spokesman said.

A spokesman for ValueAct declined to comment.

San Francisco-based ValueAct said it has had several meetings with members of Nintendo management and that it believes in the vision the company's chief executive, Shuntaro Furukawa, has shared with ValueAct and with others.

Unlike other investment firms that push for change publicly and often ask for board seats at target companies, ValueAct prefers to work with management behind the scenes.

Star Wars, Marvel & ESPN: How Disney plans to take on Netflix in streaming

Disney is matching Netflix's standard plan and marketing the service $3 below its rival's premium version, which lets subscribers and their family members watch on as many as four devices at once.

Business Standard : Walt Disney Co. is pricing a new bundle of streaming services at a surprisingly low $12.99 a month, challenging Netflix Inc. with a package that includes family programming, live sports and a deep library of television shows.

The entertainment giant announced the combined pricing for Disney+, ESPN+ and Hulu on a conference call Tuesday with investors. It will debut as part of the November launch of the Disney+ service and represents a near 30% discount to their individual prices.

Disney is matching Netflix’s standard plan and marketing the service $3 below its rival’s premium version, which lets subscribers and their family members watch on as many as four devices at once. But two of the Disney services, ESPN+ and Hulu, carry advertising, while Netflix is commercial-free.

The company’s crusade to become a streaming giant has been a costly one. Investments in new online services led to a $553 million loss in Disney’s direct-to-consumer division, part of generally disappointing results released on Tuesday. And that deficit is expected to rise to $900 million in the current quarter.

But Disney’s trove of films and TV shows from its Marvel, Pixar and Star Wars brands will make it a formidable competitor, said Ivan Feinseth, chief investment officer at New York’s Tigress Financial Partners LLC.

“Disney has powerful content,” he said in an interview with Bloomberg Television.

HBO Max

The aggressive pricing could also create headaches for HBO Max, a streaming service from AT&T Inc. that’s scheduled to launch next spring. That package also will offer family programming and original shows. The cost for that package hasn’t been announced yet. But HBO alone costs $14.99 a month, suggesting that it will be hard to compete with Disney’s price.

Disney is betting online services will counter the loss of conventional TV viewers for flagship channels like ESPN, ABC and the Disney Channel. Earlier this year, the company spent $71 billion acquiring the movie and TV assets of Fox to bolster its future offerings.

With Hulu + Live TV, the company also offers a package of 60-plus live television channels intended to compete with cable and satellite services for $44.99 a month.