A lawsuit filed in Rhode Island against Hasbro, the owner of Magic: The Gathering, alleges significant mismanagement by company executives, including CEO Chris Cocks and former Wizards of the Coast president Cynthia Williams. The plaintiffs, shareholders Joseph Crocono and Ultan McGlone, claim that misleading statements during shareholder calls from 2021 to 2023 led to substantial financial harm, particularly through the repurchase of shares at inflated prices.
The 76-page lawsuit highlights a report by Bank of America that cautioned about an oversupply of Magic cards potentially damaging the brand's long-term value. It cites that Hasbro repurchased 1.4 million shares for $125 million between April and July 2022, resulting in an overpayment of approximately $55.9 million. Additionally, the suit points to Hasbro's strategy of overproducing cards, especially in late 2023, as a means to offset losses in other areas.
As the company prepares for its earnings call on February 10, where it will disclose the financial results for Magic: The Gathering, it has not yet commented publicly on the legal action. The outcome of this lawsuit could have significant implications for Hasbro's future operations and financial standing.