West Palm Beach Firefighters’ Pension Fund v. Hasbro, Inc.

On November 13, 2024, Bernstein Litowitz Berger & Grossmann LLP (“BLB&G”) filed a class action lawsuit in the U.S. District Court for the Southern District of New York alleging violations of the federal securities laws by Hasbro, Inc. (“Hasbro” or the “Company”) and certain of the Company’s current and former executives (collectively, “Defendants”). The action is brought on behalf of all investors who purchased or otherwise acquired Hasbro common stock between September 16, 2021 and October 26, 2023, inclusive (the “Class Period”).

On August 29, 2025, the Court appointed West Palm Beach Firefighters’ Pension Fund and City of Miami General Employees’ & Sanitation Employees’ Retirement Trust as Lead Plaintiffs and BLB&G as Lead Counsel. Lead Plaintiffs filed their amended complaint on November 26, 2025.

Hasbro’s Alleged Fraud

Hasbro is a toy, game and entertainment company that sells products including Monopoly and Play-Doh. In the years leading up to the Class Period, Magic: The Gathering (“Magic”), a strategic tabletop role-playing card game, steadily became the Company’s most important brand and drove the Company’s Wizards of the Coast and Digital Gaming (“Wizards”) division to become the Company’s most important business segment.

The complaint alleges that, throughout the Class Period, Defendants made numerous materially false and misleading statements and omissions about (i) the purported customer segmentation strategy to which Defendants attributed the steadily increasing number of Magic set releases; (ii) a 30th anniversary Magic set that purportedly sold “out of stock” quickly after its release; and (iii) the glut of obsolete Magic sets in the Company’s inventory. As a result of these misrepresentations, Hasbro common stock traded at artificially inflated prices throughout the Class Period.

In truth, Defendants knew that it was not segmentation that was responsible for Magic’s growth and set release cadence. Magic’s stunning growth before and during the Class Period had in truth been driven by Hasbro’s practice of releasing specific Magic sets that could be thrown together at low cost and on short timelines for the explicit purpose of compensating for revenue shortfalls in other Hasbro divisions. Known internally as the “parachute” strategy and spearheaded by Defendants themselves, this practice harmed Magic sales and the Magic brand.

Lead Counsel’s investigation also confirmed that Hasbro’s pivotal Magic 30th Set was not in fact “out of stock” when Defendants publicly represented that it was. Indeed, Hasbro simply posted the “out of stock” message on the Magic 30th Set sale website to falsely convey to the market that sales of the set were strong. Finally, contrary to Defendants’ statements that the Magic sets included in the Company’s elevated inventory were “upcoming [Magic] set releases,” Hasbro’s inventory in truth included leftover sets from past Magic releases that had gone unsold after the Company’s overprinting had stifled Magic demand.

The truth began to emerge on November 14, 2022, when Bank of America analysts released a report detailing their investigation into Magic and concluding that Hasbro was “killing its golden goose” and “destroying [Magic’s] long-term value” by “[o]verprinting Magic” sets. This disclosure caused the price of Hasbro stock to decline by $6.25 per share, or nearly 10%. Even as Defendants acknowledged internally that the report was correct, they continued to falsely reassure investors by falsely denying the analysts’ conclusions and falsely representing that the 30th anniversary Magic set’s sales were so strong that it sold “out of stock” within an hour of its release.

The truth was further revealed on January 26, 2023, when Hasbro announced that Wizards’ revenue for the fiscal fourth quarter of 2022 had substantially missed the Company’s guidance, and analysts’ expectations, by double-digit percentages. Bank of America analysts immediately reiterated the concerns about Magic they had raised in their November 2022 report, and other analysts also connected those concerns to the disappointing Wizards revenues. This disclosure caused the price of Hasbro stock to decline by another $5.17 per share, or 8%. However, Defendants continued to mislead the market, representing that the Company’s Wizards inventory was elevated because it contained Magic sets in anticipation of upcoming releases. 

The full truth was revealed on October 26, 2023, when Hasbro announced its financial results for its fiscal year 2023 third quarter and shocked investors by disclosing that, even after the Magic releases that had purportedly caused the buildup of Magic sets in Wizards’ inventory, that inventory remained more stubbornly elevated than inventories elsewhere in the Company. As a result of this disclosure that the Company’s inventories contained obsolete unsold Magic sets, the price of Hasbro stock fell by another $8.91 per share, or over 16%.

If you wish to discuss this action or have any questions, please contact Scott R. Foglietta of BLB&G at 212-554-1903, or via e-mail at scott.foglietta@blbglaw.com.