The lawsuit specifically concerns Hasbro’s “Magic: The Gathering” brand, which the plaintiffs argue is its “most important line of products.”
“Magic is a popular card game which notably features rare cards highly sought after by collectors,” according to the lawsuit. “Such cards may fetch upwards of thousands of dollars on the secondary market.”
“Given the nature of Magic’s secondary market, the rate at which new Magic card sets are printed and sold directly impacts the value of existing Magic cards to collectors. As such, the overprinting of new Magic sets would reduce the value of existing Magic sets. Although analysts and investors consistently inquired as to whether the Company was in fact overprinting Magic sets, the Individual Defendants repeatedly denied such speculation,” the lawsuit maintains.
The lawsuit says that a damning report by Bank of America in 2022, however, found that Hasbro was “overproducing Magic cards, which have propped up Hasbro’s recent results but are destroying the long-term value of the brand.”
The lawsuit contends that statements and actions made by the Hasbro defendants “caused the Company substantial harm by causing it to repurchase its own shares at artificially inflated prices.”
“In total, the Company spent an aggregate amount of approximately $125 million to repurchase approximately 1.4 million shares of its own common stock at artificially inflated prices from April 2022 to July 2022,” according to the plaintiffs, who are being represented by Sarah Maneval and Saadia Hashmi of The Brown Law Firm in New York City. Affiliated local counsel is Higgins, Cavanagh, and Cooney.
“In total, this caused the Company to overpay for repurchases of its own stock by approximately $55.9 million," the lawsuit maintains.
Hasbro did not respond to a request for comment at the time of publication.
