A self-described “investor rights law firm” filed a lawsuit Wednesday alleging that Hasbro, the tabletop gaming and toy company, misrepresented its excessive inventory to investors, something the firm says is a violation of federal securities laws. Polygon reached out to Hasbro for comment and has yet to hear back. Bernstein Litowitz Berger & Grossmann (the law firm) filed a complaint in a New York court on behalf of the West Palm Beach Firefighters’ Pension Fund, asking the court to grant the case class action status — meaning other investors and stock purchasers can participate.
Hasbro, like other gaming companies, saw a boost in interest and sales during the pandemic, when people were looking for things to do in their homes; games were an obvious choice. The lawsuit alleges Hasbro purchased inventory to meet that demand — but ended up buying too much. Hasbro allegedly told investors the high purchasing was necessary to “mitigate supply chain risk and meet consumer demand” ahead of the 2022 holiday season, according to the lawsuit.
When that inventory sat, Hasbro said the stock “reflected outstanding and anticipated demand” and not a decreased demand. The lawsuit alleges Hasbro was intentionally misleading investors and knew it “overpurchased inventory to an extend that significantly outpaced customer demand.” The timeline makes sense: 2022 is when the world started opening up more broadly, and people were eager to get out of their houses.
Hasbro annou.
