May be of interest here:

WSJ

* Hasbro Activist Begins Proxy Fight, Urges Dungeons & Dragons Spinoff
* Alta Fox Capital Management nominates five directors to company's board, saying stock has been trailing broader market

A little-known activist investor is seeking to add several directors to Hasbro Inc.'s board and is urging the toy maker to make changes including a spinoff of its fast-growing unit housing games such as Dungeons & Dragons.

Alta Fox Capital Management LLC, which has a 2.5% stake in Hasbro worth roughly $325 million, has nominated five directors to its board, according to a letter viewed by The Wall Street Journal that will be sent to the company's shareholders. Shareholders will vote on director nominees at Hasbro's annual meeting this spring.

Alta Fox, which says in the letter that it has spoken to Hasbro, noted that the company's stock price is lower than it was five years ago and has significantly trailed the broader market. Alta Fox believes Hasbro could double its valuation by spinning off the Dungeons & Dragons business.

Pawtucket, R.I.-based Hasbro, which has a market value of about $13 billion, owns such well-known brands as Nerf and Monopoly. It holds the rights for toys based on the popular children's show "Peppa Pig" and Walt Disney Co. 's blockbuster "Frozen" movies, though Mattel Inc. recently won back the lucrative rights to "Frozen."

It has been a period of turmoil for Hasbro, which named Chris Cocks as its new chief executive officer in January following the death of longtime CEO Brian Goldner last year.

Hasbro and Mattel, whose brands include Barbie and Hot Wheels, have been fierce rivals over the years. In 2017, when Hasbro was twice the size of Mattel, it made an unsuccessful takeover offer for its rival. Mattel has since improved its footing with cost cuts, an overhauled leadership team and updates to its brands, though its stock has also languished and the company's market value stands at about $9 billion.

Both companies enjoyed a boost during the Covid-19 pandemic as lockdowns spurred parents to spend on toys, though decreased attendance at movie theaters hit some character-driven toy sales.

A bright spot in Hasbro's business has been its Wizards of the Coast and Digital Gaming unit, which in addition to the cult-favorite role-playing game Dungeons & Dragons includes the card game Magic: The Gathering. The unit's revenue rose 42% in 2021 to $1.29 billion and accounted for roughly 46% of the company's $1.31 billion of adjusted earnings before interest, taxes, depreciation and amortization.

Alta Fox estimates in the letter that if the division was separated, it could be worth roughly as much as Hasbro, or $13 billion or more.

The activist takes issue with Hasbro's capital allocation, including its acquisition of Entertainment One in 2019, and its Brand Blueprint strategy, which focuses on promotion through multimedia storytelling.

The nominees include the founder and CEO of cloud-computing company Appian Corp. , Matthew Calkins, and Jon Finkel, a managing partner of an investment firm who has played games including Magic professionally.

Fort Worth, Texas-based Alta Fox is working with EnTrust Global, the investment firm run by Gregg Hymowitz that backs many of activist investors' biggest bets, a person familiar with the matter said.

Alta Fox's flagship fund was launched in 2018 by Connor Haley, who previously worked at New York hedge fund Scopia Capital Management LP. Though it has kept a relatively low profile since then, Alta Fox in 2020 successfully pushed Collectors Universe Inc., which authenticates and grades collectibles, to sell itself to a group of investors that included the hedge-fund manager Steven A. Cohen.

I've read through this multiple times and have no clue what I'm supposed to take away from it. What is the investor an "activist" for, and, is that even relevant to this? Because it seems like this is about boring financial stuff.

Quote from: Cat the Bounty Smuggler on February 16, 2022, 07:32:27 PM
I've read through this multiple times and have no clue what I'm supposed to take away from it. What is the investor an "activist" for, and, is that even relevant to this? Because it seems like this is about boring financial stuff.

An activist investor is one who pushes for changes in the company, instead of just passively holding shares. Carl Icahn is probably the most iconic example. It's a completely different use of the word than social activism.

The takeaway from this story is that someone with influence is pushing to spin off Wizards of the Coast from Hasbro.

From Investopedia:

" An activist investor is an individual or group that buys a significant stake in a public company in order to influence how the company is run, such as by obtaining seats on its board of directors. Companies that are mismanaged, have excessive costs, could be run more profitably if taken private, or have other problems the activist investor believes they can fix are often targets for activist investors. "

Probably the most famous(infamous) activist investor is Carl Icahn.

Awwww, shit.

Given WotC's current trajectory, I believe that spinning itself off from Hasbro would destroy it & Dungeons & Dragons. Therefore, I wholeheartedly approve of this plan.

They should license D&D action figures and video games...

Quote from: Pat on February 16, 2022, 07:37:54 PM

Quote from: Cat the Bounty Smuggler on February 16, 2022, 07:32:27 PM
I've read through this multiple times and have no clue what I'm supposed to take away from it. What is the investor an "activist" for, and, is that even relevant to this? Because it seems like this is about boring financial stuff.

An activist investor is one who pushes for changes in the company, instead of just passively holding shares. Carl Icahn is probably the most iconic example. It's a completely different use of the word than social activism.

The takeaway from this story is that someone with influence is pushing to spin off Wizards of the Coast from Hasbro.

Thanks. As my use of "boring financial stuff" should indicate, I'm not really into finance stuff.

Quote from: Pat on February 16, 2022, 07:37:54 PM
...
The takeaway from this story is that someone with influence is pushing to spin off Wizards of the Coast from Hasbro.

Yup, because:

Quote from: WSJ investor shit
...
Alta Fox estimates in the letter that if the division was separated, it could be worth roughly as much as Hasbro, or $13 billion or more.
...

Of course the spinoff would mean that those already holding shares would make more money...

Quote from: Ratman_tf on February 16, 2022, 07:57:24 PM
They should license D&D action figures and video games...

This is part of the investors beef. Hasbro has invested heavily in digital initiatives for D&D, and they largely have fuckall to show for it as of right now:

Quote from: WSJ investor shit
...
The activist takes issue with Hasbro's capital allocation, including its acquisition of Entertainment One in 2019, and its Brand Blueprint strategy, which focuses on promotion through multimedia storytelling.
...

When they could have been licensing this stuff to 3rd party developers for the past few years and raking in cash instead of spending it.

For various reasons WotC seems to want to do lots of this stuff in-house.

The investor is saying: "Fuck that long term shit that may not work out, license this hot IP and give me a fatter dividend payment now!"

Quote from: Zelen on February 16, 2022, 07:51:49 PM
Given WotC's current trajectory, I believe that spinning itself off from Hasbro would destroy it & Dungeons & Dragons. Therefore, I wholeheartedly approve of this plan.

The motion is seconded...

I'm usually opposed to the actions of activist investors.  They're looking for a quick profit and don't care if it damages the company, long-term investors, customers, the employees, and management.  They are never as qualified as management to make decisions about the direction of a company.  The only argument in their favor as that if management is enriching itself at the expense of investors (which is actually illegal) it's a remedy for that.

All that said, in this case selling D&D would be an opportunity for someone to do a better job with it, so I'd really like to see it happen.

HAS will spin it off, lever it up, then spend the proceeds on share repo. Green-ass SpinCo management will screw it up because they're used to having someone else wipe their noses but, with the added debt, they'll have little to no margin for error and wind up distressed and sold to Apollo or Platinum. A tale as old as time.

Quote from: Jaeger on February 16, 2022, 08:23:12 PM
Of course the spinoff would mean that those already holding shares would make more money...

Yep. That's the drive behind an activist investor. They buy companies they think have potential, but need a shakeup. So they push for a restructuring of the company, which often includes divestment. The biggest criticism of activist shareholders is they're looking for a quick buck, and their proposed changes aren't always in the long term interest of the company.

Edit: This time I was the one who got ninjaed, by Mishihari.

Quote from: Mishihari on February 16, 2022, 08:58:26 PM
I'm usually opposed to the actions of activist investors.  They're looking for a quick profit and don't care if it damages the company, long-term investors, customers, the employees, and management.  They are never as qualified as management to make decisions about the direction of a company.  The only argument in their favor as that if management is enriching itself at the expense of investors (which is actually illegal) it's a remedy for that.

All that said, in this case selling D&D would be an opportunity for someone to do a better job with it, so I'd really like to see it happen.

The purpose of activist investors isn't to handle the nuts and bolts of running the company, but to shift strategy and restructure. While they have a mixed track record, overall it's net positive because they bring in an outside perspective and can shakeup hidebound management and force them to react to the market. It's rarely about management enriching themselves, which is something most activist investors would want to avoid because fraud can result in the company being tied up in legal woes, and their assets being slashed in value or stuck in limbo. It's more about ossification and resting on their laurels.

In this case, they're basically saying Hasbro is a big blob that's collected too many random things, and should split up so the different parts can each focus on what they do best.

Quote from: Zelen on February 16, 2022, 07:51:49 PMGiven WotC's current trajectory, I believe that spinning itself off from Hasbro would destroy it & Dungeons & Dragons. Therefore, I wholeheartedly approve of this plan.

Absolutely!!!

Anything that hastens WotC's death is good news.

Quote from: Spinachcat on February 17, 2022, 02:14:57 AM

Quote from: Zelen on February 16, 2022, 07:51:49 PMGiven WotC's current trajectory, I believe that spinning itself off from Hasbro would destroy it & Dungeons & Dragons. Therefore, I wholeheartedly approve of this plan.

Absolutely!!!

Anything that hastens WotC's death is good news.

Quote from: Pat on February 16, 2022, 09:17:27 PM

Quote from: Mishihari on February 16, 2022, 08:58:26 PM
I'm usually opposed to the actions of activist investors.  They're looking for a quick profit and don't care if it damages the company, long-term investors, customers, the employees, and management.  They are never as qualified as management to make decisions about the direction of a company.  The only argument in their favor as that if management is enriching itself at the expense of investors (which is actually illegal) it's a remedy for that.

All that said, in this case selling D&D would be an opportunity for someone to do a better job with it, so I'd really like to see it happen.

The purpose of activist investors isn't to handle the nuts and bolts of running the company, but to shift strategy and restructure. While they have a mixed track record, overall it's net positive because they bring in an outside perspective and can shakeup hidebound management and force them to react to the market. It's rarely about management enriching themselves, which is something most activist investors would want to avoid because fraud can result in the company being tied up in legal woes, and their assets being slashed in value or stuck in limbo. It's more about ossification and resting on their laurels.

In this case, they're basically saying Hasbro is a big blob that's collected too many random things, and should split up so the different parts can each focus on what they do best.

I'm quite aware of how activist investors work.  The issue is that management has tons more experience in the industry and can better decide on strategy.  Most of the time when I read a news story on the topic I can tell that the professed strategy is simplistic with no more than cursory knowledge of the industry and what I picked up in my MBA program.  Activist investors make their money by transferring wealth to themselves and leaving wreckage in their wake.  On occasion they'll actually solve a problem but these seem to be few and far between.