Plaintiff's law firm issued a press release on September 28, 2018, announcing the lawsuit. According to the press release, the Complaint charges Hasbro, Inc. ("Hasbro" or the "Company") and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Hasbro is a global play and entertainment company that promotes its brands through immersive storytelling across mediums, including television, film, digital and more. Hasbro’s biggest customers are Wal-Mart Stores, Inc., Toys “R” Us, Inc. and Target Corporation, which accounted for approximately 18%, 9%, and 9% respectively, of its consolidated net revenues in fiscal year 2016.
The Complaint alleges that during the Class Period, Defendants made false and misleading statements and/or failed to disclose adverse information regarding Hasbro’s business and prospects. Specifically, Defendants knew or recklessly disregarded that Hasbro’s relationship with Toys “R” Us was becoming increasingly important to Hasbro’s business, as Toys “R” Us was the primary retail brick-and-mortar toy store in the United States, and that Toys “R” Us was in far worse financial condition than was being publicly reported and it would have to dramatically scale back its operations or file for bankruptcy and liquidate. In addition, Hasbro was experiencing significant undisclosed adverse sales issues in two key markets – the United Kingdom and Brazil – which were negatively impacting the Company’s efforts to grow sales in those markets. As a result of this information being withheld from the market, the price of Hasbro common stock was artificially during the Class Period to over $115 per share and Hasbro insiders were able to sell $147 million worth of their personally held Hasbro stock to the public at inflated prices.
On July 24, 2019, the Court issued an Order appointing Lead Plaintiff and Counsel. Lead Plaintiff voluntarily dismissed the case on October 18.