Mattel Shares Fall After Rival Toy Maker Spin Master Gets Deal With DC Comics

Shares of toy maker Mattel (MAT) are extending declines on Monday after Spin Master announced late Friday that it had it has entered into a three-year global licensing agreement with AT&T's (T) Warner Bros. Spin Master, a toy maker that trades on the Toronto Stock Exchange, said in a statement that at the beginning of Spring 2020, it will take over new toy licensee for DC in the boy's action category, remote control, and robotic vehicles, water toys and games, and puzzles. This licensing category was previously held by Mattel. "Partnering with an iconic brand like DC is a major milestone for Spin Master and is part of our strategy to invest in successful licenses to further grow and diversify our business," said Ben Gadbois, Spin Master's Global President, and COO.

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ANALYST SAY NEGATIVE FOR MATTEL: BMO Capital analyst Gerrick Johnson said in a report to investors on Friday that the report of DC superheroes licensing deal between Spin Master and Warner Bros is a negative for Mattel. While the report has not been confirmed, the analyst believes that the business will be lost after 2019. Longer term, the analyst kept his Outperform rating and $20 price target on Mattel and believes that its management "can facilitate needed changes in culture, product development, digital content, and partner relationships to drive sales and earnings growth".

PRICE ACTION: In afternoon trading, shares of Mattel are down 3% to $9.27 per share.

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