Wyatt v. Mattel, Inc. et al 2:19-cv-01646-PA-MAA — On March 6, 2019, investors sued Mattel, Inc. (“Mattel” or the “Company”) in United States District Court, Central District of California. Plaintiffs in the MAT class action allege that they acquired Mattel stock at artificially inflated prices between February 7, 2019 and February 15, 2019 (the “Class Period”). They are now seeking compensation for financial losses incurred upon public revelation of the Company’s alleged misconduct during that time. For more information on the MAT Lawsuit, please contact us today!
Summary of the Allegations
Mattel (NASDAQ: MAT) bills itself as “a global learning, development and play company.” In this role, the Company says it promotes optimism and encourages children to discover their talents and abilities at a young age.
The Company says it also teams up with other businesses including “leading entertainment and technology companies” to create “inspiring and innovative products.” Some of Mattel’s best-known products include American Girl®, Barbie®, Fisher-Price®, Hot Wheels® and Thomas & Friends™. Its products are sold in at least 150 countries.
According to its website, Mattel employs more than 30,000 people worldwide and has operations in 40 countries and territories.
Summary of Facts
Mattel and two of its senior officers (the “Individual Defendants”) are now accused of deceiving investors by lying and/or withholding critical information about the Company’s business practices and prospects during the Class Period.
Specifically, they are accused of omitting truthful information about product demand from SEC filings and related material. By knowingly or recklessly doing so, they allegedly caused Mattel stock to trade at artificially inflated prices during the time in question.
The truth came out when the Company provided its “2019 outlook” on February 15, 2019. One of the Individual Defendants confirmed the disappointing projections, saying in relevant part: “Turning to 2019, we expect gross sales to be flat in constant currency…This year we expect continued growth in Barbie and Hot Wheels though not at the same extent of 2018 levels and the stabilization of Fisher-Price by the end of the year.”
A closer look…
As alleged in the March 6 complaint, the Company and/or Individual Defendants made several false and misleading public statements during the Class Period.
For example, in an announcement made on February 7, 2019, the Company stated in pertinent part: “Mattel was the #1 global toy company in 2018, per NPD.”
In the same announcement, Mattel also stated in pertinent part: “Barbie® Gross Sales in the quarter increased 12% as reported and 15% in current currency, versus prior year, marking the fifth consecutive quarter of growth…”
In the same announcement, Mattel added in pertinent part: “Hot Wheels® Gross Sales for the quarter increased 9% as reported and 12% in constant currency, versus prior year, and reached the brand’s highest full year Gross Sales in its history.”
What the Company failed to disclose, however, was that “demand for the Company’s products, including Barbie and Hot Wheels, was declining,” and that “the Company had an excess of product supply.”
Impact of the Alleged Fraud on Mattel’s Stock Price and Market Capitalization
|Closing stock price prior to disclosures:
|Closing stock price the trading day after disclosures:
|One day stock price decrease (percentage) as a result of disclosures:
The following chart illustrates the stock price during the class period:
Actions You May Take
If you have purchased shares during the Class Period, you may join the class action as a lead plaintiff, remain a passive class member, or opt out of this litigation and pursue individual claims that may not be available to the class as a whole.
NOTE: You must file an application to be appointed lead plaintiff prior to this deadline in order to be considered by the Court. Typically, the plaintiff or plaintiffs with the largest losses are appointed lead plaintiff.
In order to identify your potential exposure to the alleged fraud during the time in question, you may wish to perform an analysis of your transactions in Mattel common stock using court approved loss calculation methods.
Recently Filed Cases
Listed below are recently filed securities class action cases being monitored by us, along with the class period and the deadline to file a motion to be appointed as the Lead Plaintiff in the action. Please contact us if you would like an LK report for any of these cases:
Levi & Korsinsky is a leading securities litigation firm with a hard-earned reputation for protecting investors’ rights and recovering losses arising from fraud, mismanagement and corporate abuse. With thirty attorneys and offices in New York, Connecticut, California and Washington D.C., the firm is able to litigate cases in various jurisdictions in the U.S., England, and in other international jurisdictions.
Levi & Korsinsky provides portfolio monitoring services for high-net worth investors and institutional clients. Our firm also assists investors in evaluating whether to opt-out of large securities class actions to pursue individual claims.