Hasbro is being sued

LordGigaIce

Another babka?
Citizen
Hasbro is being sued for alleged securities law violations.

According to the filed complaint, it is alleged that defendants made numerous materially false and misleading statements and omissions about the quality inventory that Hasbro held throughout the class period, and represented that its rising inventory levels reflected outstanding and anticipated demand, rather than excess supply that outpaced waning demand. As a result of the foregoing, Hasbro common stock traded at artificially inflated prices throughout the Class Period and defendants' statements about the Company's business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
 

CoffeeHorse

Exhausted, but still standing.
Staff member
Council of Elders
Citizen
I read the complaint. This will either quietly settle out of court and you'll never hear about it again, or it'll be dismissed. There's no case here.

Nyman also represented that because of big entertainment releases that the Company was expecting leading into 2023, the “inventory buildup” meant that the Company was "ready for that."

... And?

Can anybody think of any movies that underperformed in 2022 and 2023? Any movies at all?

Plaintiffs seem to envision toys as just a monolithic blob of product that Hasbro over-ordered because of the pandemic, and then continued to over-order for no reason, and had no sincere belief that they would sell it.

To Hasbro, and to us, toys encompass an insane number of differentiated brands, each broken up into differentiated sublines, sold in differentiated waves, often highly tied to the performance of media projects. Hasbro has decades of data saying they can anticipate a significant sales bump from movies. Suddenly the bumps aren't happening like they used to. Movies are underperforming whether they're good or not, and that leads to toys underperforming.

There is no world in which this amounts to SEC fraud on Hasbro's part.
 

LordGigaIce

Another babka?
Citizen
Yeah this only goes anywhere if the plaintiffs can produce hard evidence Hasbro knowingly lied about projected sales figures. Otherwise Hasbro has the easiest defense in the world- "sales didn't live up to projections. No one's more broken up about it then us, but it happens."
 
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CoffeeHorse

Exhausted, but still standing.
Staff member
Council of Elders
Citizen
This is why they're asking for a jury trial. There's no case here, just the threat that a jury could be bewildered into feeling like the big corporation must have done something wrong. They're hoping Hasbro will just pay the ransom and settle with no admission of wrongdoing.

I hope Hasbro's legal department hasn't been hit too hard by the layoffs, because the team they've had is not in the habit of caving to dumb lawsuits like this, and their court filings are very entertaining.
 

lastmaximal

Administrator
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Council of Elders
Citizen
Yeah, the very idea that a toy company knowingly throws money down the drain to churn out absurd amounts of product they know won't sell -- when so much of what a company even gets to do is down to what retailers want on shelves! -- is suspect.

Everything has projected sales. Not everything lives up to them. Lather, rinse, repeat. This will rightly accomplish little more than being content fodder for YouTubers with meme levels of understanding the industry.
 


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