Guys, this needs to be mentioned...
Ridley does NOT grab Pikachu in the Direct. Now I'm sure of it. I went with it even when the shadow didn't seem to completely fit Pikachu's shape (strangely skinny despite no sign shadows work that way on the stage, doesn't struggle at all, seemingly vanishes when Ridley starts moving off screen).
It's actually (ironically) the tip of Ridley's tail. Examining the scenes again, I noticed that just before the part where it looks like he's holding Pikachu you can see the shadow of his tail, and the shadow's jagged, almost like Pikachu's tail. But at that moment it's also clear it's just that: a tail. Soon it moves closer to the spot on the shadow that seems to be around his hands, so it starts to look like he's holding something.
But I'm now convinced he is holding nothing. What does that mean for all the strange movement he's doing? Who knows. It's all just strange movement. Maybe this Ridley really is incomplete. Smash 3DS is coming out sometime (late) summer, but that still leaves a good 7 months for this boss rendition of Ridley to be completed. As ridiculous as it sounds, maybe Sakurai and Co. really aren't finished with Pyrosphere.
Among other things, Ridley seems to cover some considerable length between each of his hands. I could tell by matching the shadow of his hands to the red-white plates on the ground then looking at some Direct videos of the Pyrosphere.
And I'm also sure it's not a composite Ridley design, though that doesn't mean it isn't an improved Other M Model. The parts of the shadow that look to be Ridley's arm also have two spike-like protrusions, just like the Other M model. This could be a good thing. Honestly I would think it as bad news if we had a composite design that was still being used for a boss role. As it is now, the possibility of Sakurai using clones to his advantage is still on the table.