Barchart reported huge, unusual call option trading in Mattel Inc. (MAT) stock today. Mattel management is reportedly under pressure from a large shareholder to explore the sale of the company, according to a CNBC report using both Reuters and the Wall Street Journal as sources.
MAT stock is up significantly in the past several days and is now at $15.93, up +25% from a Sept. 30 low of $12.66. An Oct. 1, 2026, CNBC report, quoting the Wall Street Journal as a source, said that Authentic Brands Group, a private company, is discussing a $20 per share or $6 billion offer for the company.
MAT stock - last 3 months - Barchart - Oct. 6
The Oct. 6 CNBC report said that Ariel Investments, which owns a 5.4% equity stake in the toymaker, sent a letter from its Chairman and Co-CEO John Rogers, arguing that a premium could be obtained from a strategic buyer.
The Barchart report today shows that over 12,300 call options have traded at the $18.00 strike price for expiration on Jan. 15, 2027, and is the highest-volume option compared to its prior outstanding calls at that strike.
This volume is almost 96x times the prior number of calls outstanding at $18.00 for Jan. 15, 2027, expiry.
MAT calls expiring Jan. 15, 2027 - Barchart Unusual Stock Options Activity Report - Oct. 6, 2026
That makes the strike price about $2.00 higher than today's price, or +12.5%. However, after paying the average $1.10 premium, these call option buyers hope to see MAT stock rise over 19.4% to $19.10. That's an all-in price, which assumes that the call option buyer will exercise the call option if the stock goes higher than this.
Some of these investors may just be in this for a flip. They expect that if a buyer comes forward, after management agrees to sell the company, the call option price may move higher.
However, these investors will have a little over one quarter for that to work out - i.e., 101 days to expiry (DTE).
So, the question remains: is this a worthwhile investment? Will a buyer for Mattel really pay more than $19.10 for MAT stock?
What is MAT Stock Worth
Analysts don't seem to think so. Right now, Yahoo! Finance says its survey of 15 analysts is $18.17 per share. Barchart's mean analyst price target is $17.82.
These price targets are lower than the all-in price mentioned above, $19.10.
However, the Oct. 1, 2026, CNBC article, using the WSJ as a source, reports that discussions about a $20.00 per share offer, or $6 billion, have been taking place with the company.
Note that if the company is sold for $20, that would give it a forward price/earnings (P/E) of 15.3x. That is based on analysts' 2026 earnings per share (EPS) forecasts of $1.31 per share for this year.
That is well over its historical 5-year average of 12.6x, according to Morningstar. Nevertheless, it's not uncommon in a takeover situation for a premium to be paid. A $20 price tag would involve a 21.4% premium (i.e., 15.3x/12.6x).
How This Works Out for Call Option Buyers
It's clear MAT stock may be in play here. That is what is attracting such huge interest in these call options.
Nevertheless, investors looking to copy this play should be very careful. This is a highly speculative trade.
For example, let's say there is a 60% chance that a $20 offer comes through. That would give the call buyers a 60% chance of making $20 - $19.10, or $0.90 on an investment of $1.10:
$0.90/$1.10 x 60% = 81.8% x 60% = 49%
But there is also a 40% chance that MAT could drop back to $13.00, i.e., -18.75%, if a deal doesn't come through, i.e., -7.5%.
So, the expected return ER is:
+49% -7.5% = +41.5%
That could be a good deal given that it is a positive ER, but the potential for loss could be more than an investor may be willing to take.
The bottom line is that MAT call options are highly speculative, and an investor should carefully consider the odds and risks.
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