Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : MAT - Mattel - toysRthem -- Ignore unavailable to you. Want to Upgrade?

To: Doughboy who wrote (125)	4/6/1999 10:50:00 AM
From: Mike 2.0	Read Replies (1) \| Respond to of 706

Re: Mattel however, paid $700 million for Pleasant Co., a business that has $300 million in annual revenue. is paying $3.8 billion for Learning Co., which had $850 million in revenue in 1998. Bozarth said the price Mattel paid for each company was appropriate and that "both were structured in such a way as to be accretive to earnings." Still, McGowan said, "toy companies just don't get that kind of multiple." This analyst is missing the point. Pleasant Co. is not just a "toy company" but they have a franchise of "American Girl" and a new selling channel for Mattel which justify a premium. And file this IMHO under the "Duh" department: Learning Company is not a "toy company." You also don't get gross margins around 70% from a "toy company" either! Overall, the article is IMO a fairly balanced critique of Jill Barad. I have no concerns re her focus, style, etc. OTOH I agree the new Star Wars film is going to be a huge juggernaut which will be a challenge for Mattel to overcome in the short term.