Introduction - Mayhem from Lego Retrenchment Exercise and Toys 'R' Us Possible Bankruptcy
Employees in toy companies returned to work after the Labor Day holiday to the news that their counterparts in Lego could be facing job cuts. Jakks Pacific (NASDAQ:JAKK), Hasbro (NASDAQ:HAS), and Mattel (NASDAQ:MAT) fell 4.3%, 3.1%, and 1.7%, respectively. Apparently, misery loves company and news of Toys 'R' Us possibly filing for bankruptcy protection emerged hot on the heels of Lego's announcement. Market players reacted swiftly to the negative report, sending the shares of the three toy companies plunging around 2.30pm on Wednesday, after what was initially a peaceful trading session for the trio. The shares of Jakks Pacific declined the most again (-4.6%), followed by Mattel (-3.2%) and Hasbro (2.0%). In this article, I lay down the reasons why I felt Hasbro, and to a lesser extent Mattel, have been unfairly dragged down by the two incidents.
