Why Shares of Mattel, Inc. Are Jumping Nearly 10% Wednesday Morning

What happened

Shares of Mattel, Inc. (NASDAQ: MAT), a leading global manufacturer and marketer of toys and family products, popped almost 10% Wednesday morning after it was reported the company rejected a second merger from MGA Entertainment.

So what

Here is some context on the rejected offer. Mattel has struggled recently, with its stock declining 19% in May, thanks to escalating trade tensions between the U.S. and China. In addition, President Donald Trump's threat of starting a trade war with Mexico added fuel to the fire -- both China and Mexico are important cogs in Mattel's supply and distribution network. Despite Mattel's struggles, management doesn't believe MGA's offer was in the best interest of investors. The deal would have been a tough pill to swallow, with conditions that MGA's CEO would take over in the same role at Mattel and that all current directors would resign without additional compensation.

A box of toys

Image source: Getty Images.

Now what

MAT data by YCharts

With the MGA merger off the table, at least for now, Mattel's focus returns to its ongoing turnaround. The toy maker hopes a focus on core brands, capturing new licenses, and bringing toys to market faster will help improve sales. Mattel faces ongoing challenges, but it still holds a strong position in the toy industry, has powerful brands, and could be poised to rebound

10 stocks we like better than Mattel
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Mattel wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks


*Stock Advisor returns as of March 1, 2019


Daniel Miller 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.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


More Related Articles

Info icon

This data feed is not available at this time.

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.