- Company Name
- Mattel, Inc.
- Stock Symbol
- Class Period
- February 7, 2019 to February 15, 2019
- Motion Deadline
- May 5, 2019
- Central District of California
The complaint charges Mattel and certain of its officers with violations of the Securities Exchange Act of 1934. Mattel is a children’s entertainment company that designs and sells toys and consumer products, including under the Barbie, Hot Wheels, Fisher-Price and American Girl brand names.
The complaint alleges that throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose material adverse facts about the Company’s business and prospects. Specifically, defendants failed to disclose that demand for the Company’s products, including Barbie and Hot Wheels, was declining and that, as a consequence, the Company had an excess of product supply. As a result of defendants’ false statements and/or omissions, Mattel securities traded at artificially inflated prices during the Class Period, with its stock price reaching a high of more than $17 per share.
On February 7, 2019, Mattel announced fourth quarter and full year 2018 results, highlighting the growth of its Barbie and Hot Wheels brands, including a 12% increase in gross sales for Barbie and a 9% increase in gross sales for Hot Wheels. After this announcement, the price of Mattel shares increased nearly 38% over the next four trading days, from a close of $12.39 per share on February 7, 2019 to a close of $17.07 per share on February 13, 2019.
Then, a week later, on February 15, 2019, defendants announced the Company’s 2019 outlook, which fell short of investor expectations, stating that they “expect[ed] gross sales to be flat,” and that, while they expected continued growth in Barbie and Hot Wheels, “not to the same extent of 2018 levels.” On this news, the Company’s share price fell $3.09 per share, or more than 18%, to close at $13.82 per share on February 15, 2019.