It looks like Wizards Of The Coast (WoTC) is the only strong profitable business division at HAS. Last June, HAS was able to reject a shareholder challenge led by Alta Fox. The activist investors wanted:
- HAS to sell the Entertainment One division they had purchased in 2019
- Explore the possibility of spinning off WoTC into a separate company
- Board shakeup
HAS rejected the challenge and re-elected all 12 board members, but ultimately did sell off Entertainment One later in the year. Earnings began to tank the quarter after the activist challenge was rejected. Last quarter, HAS posted its biggest losses in over 10 years – while WoTC's sales spiked 40% with Baldur's Gate 3 in the same quarter.
There's a perception among WoTC's fans that Hasbro is “killing its golden goose” by trying to force more monetization on the D&D and M:TG businesses within WoTC to compensate for failures in other parts of the business. Most of those customers would love to see WoTC spun off from HAS.
As its own stock, WoTC's public perception and value would benefit by being separate from HAS… but what's in it for HAS' current shareholders and management to allow that to happen? I don't know much about spinoffs — I presume HAS would raise a lot of cash by IPOing WoTC and would retain a significant interest.
Could Hasbro Face Another Activist Shareholder Challenge over WoTC in the next 2-3 Years?
Leave a Reply