At a Glance
- Hasbro is sued for mismanaging Magic: The Gathering stock by over-producing cards.
- Executives face accusations of inflating share prices to buy back shares.
- The suit claims a $55.9 million over-payment on a $125 million repurchase.
- Why it matters: Investors and collectors could see the value of the brand erode.
In a lawsuit filed on January 21 in Rhode Island, Hasbro faces allegations that its top leaders deliberately produced too many Magic: The Gathering cards, inflating the company’s stock and allowing it to repurchase shares at inflated prices.
The Lawsuit
The 76-page complaint names CEO Chris Cocks, several current and former board members, and former Wizards of the Coast president Cynthia Williams. Plaintiffs Joseph Crocono and Ultan McGlone, who have held shares since the early 2020s, argue that comments made by Hasbro during shareholder calls from 2021 to 2023 were “materially false and misleading.” They claim those statements caused the company to buy back its own shares at artificially high prices, harming the company’s value.
The suit points to the popularity of Magic cards among collectors, noting that individual cards can sell for “upwards of thousands of dollars on the secondary market.” The plaintiffs allege that the company’s over-production strategy allowed it to cover shortfalls elsewhere in its business.
Share Repurchase Details
Between April and July 2022, Hasbro repurchased 1.4 million shares for $125 million. The lawsuit asserts that the company over-paid itself by $55.9 million. The over-production of cards, especially from September 2023 to October 2023, is said to have facilitated this over-payment.
| Period | Action | Amount |
|---|---|---|
| April-July 2022 | Share repurchase | $125 million |
| Over-payment | $55.9 million |
Bank of America Report
A 2022 report from Bank of America warned that the “oversupply” of Magic cards “has propped up Hasbro’s recent results but is destroying the long-term value of the brand.” The lawsuit cites this report to support claims that the company’s strategy is harming the brand’s future.
Magic: The Gathering’s Recent Strategies
Hasbro has promoted aggressive cross-overs such as Universes Beyond and Secret Lair, partnering with big brands. The company highlighted the success of the Final Fantasy set in 2025 as a major revenue driver. Critics say that over-producing cards during the 2023-2024 period helped mask financial shortfalls in other areas of the business.
Key Points
- Magic cards can fetch high secondary-market prices.
- Over-production may lower the cost of new cards versus creating entirely new sets.
- The company’s earnings calls have praised these cross-overs.
What Happens Next?
The lawsuit arrives weeks before Hasbro’s earnings call on February 10, when the company will disclose Magic‘s performance for the prior fiscal year and quarter. At the time of writing, Hasbro has not publicly responded to the suit. io9 has reached out for comment.
Key Takeaways
- The lawsuit accuses Hasbro’s executives of mismanaging the Magic brand.
- Alleged over-production led to a $55.9 million over-payment on a $125 million share repurchase.
- The Bank of America report supports claims that the strategy harms long-term brand value.
- Investors and collectors may see the brand’s value decline if the allegations hold.
The case underscores the importance of transparent corporate governance, especially for companies with valuable intellectual property.
