Yahoo Finance Why Mattel Stock Fell Today
What happened
Shares of Mattel (NASDAQ: MAT) were down 6% as of 3:30 p.m. EDT Wednesday following news it has officially called off merger talks with fellow toy maker MGA Entertainment.
But the news didn't come in a typical press release. Rather, in a scathing statement earlier today, MGA CEO Isaac Larian said Mattel "cannot be salvaged" given a combination of its "hostile board and management," high debt load, and a "major legal liability" stemming from its faulty Fisher Price Rock 'n Play Sleeper product.
IMAGE SOURCE: MATTEL.
So what
Then again, perhaps it's worth taking the statement with a grain of salt when we remember MGA, which claims toy brands including Little Tykes, Bratz, and L.O.L. Surprise, previously made an unsuccessful attempt to buy Mattel in 2015. We should also consider Mattel only just rejected a buyout bid from MGA last week, after which Larian accused the company of breaching its fiduciary duty to shareholders and hinted at a potential hostile takeover.
Now what
Nonetheless, with the prospect of one juicy acquisition premium apparently gone, it's hardly surprising to see Mattel stock pulling back today. And I think shareholders would do well to focus instead on the prospects of its underlying business.
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Steve Symington has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
