A new filing with the U.S. Securities and Exchange show just how important Wizards of the Coast is to its parent company, Hasbro.
Hasbro's Wizards of the Coast division, under which the popular games Magic: The Gathering, Dungeons & Dragons, and others are managed, makes up roughly 70% of the company's value. This is according to a filing with the U.S. Securities and Exchange (SEC) by asset management firm Alta Fox Commission, which, with ownership of approximately 2.5% of the Company’s outstanding shares, is one of the largest shareholders of Hasbro.
In the statement, which was filed by Connor Haley, Managing Partner of Alta Fox, it is noted that "shareholder-driven change in the boardroom is needed," citing the company's stock performance and available independent candidates for election to the Company's Board of Directors (the "Board") at the 2022 Annual Meeting of Shareholders, five of which Alta Fox has nominated.
“Following an extensive review of Hasbro's business segments, capital allocation decisions, corporate governance, executive compensation and historical performance, we have concluded that the Company is a chronic underperformer that trades at a significant discount to its intrinsic value due to a poorly executed "Brand Blueprint" strategy and various correctable issues," she writes. "While the incumbents believe they are doing a stellar job, the reality is Hasbro’s share price is lower today than it was five years ago and is currently trading near its 52-week low."
He continues, stating that "we acknowledge the apparent gaming credentials of Hasbro's recently added directors, we contend the Company needs additional change to fix the numerous issues at hand. Given that roughly 70% of the Company's value stems from its Wizards of the Coast gaming division, we believe additional gaming experience and other skillsets are needed in the boardroom."
Hasbro purchased Wizards of the Coast, then a private company, in 1999. For the year 2021, Hasbro disclosed that WotC grew revenues by 42% to nearly $1.29 billion and that the division has grew for its fourth consecutive year, marking growth in 12 of the last 13 years.
