Why HAS (Hasbro) and PGRE (Paramount) are about to begin a new Golden Age of Toys and Entertainment together – The road to Tendies are paved with toys and live action entertainment
Hasbro & Paramount are aligned for a new golden era of toys and imaginative entertainment in a way we haven't seen since the mid 90's. I'm excited as $#%! about these toys, and the FUN entertainment coming soon.
Hasbro toys are at peak engineering after years of investment, with careful "wave" rollouts to reduce overproduction to market demand, and are breaking out of the "Collector" zone that has plagued toys for 30 years.
Through their partnership with Disney (see Star Wars Black series of toys) and Marvel (see Legends series of toys), Hasbro has carefully and diligently engineered innovative new action figure features.
Supply & Demand
COVID was a major threat to most industries. Hasbro, however, may have benefited.
Let me explain.
Hasbro had GI Joe Classified figures supply totally dried up. They didn't expect the major resurgence of interest in the line, and had largely ramped up to sell to Collectors, like they have for 30 years now. This spike in demand, paired with scalpers (who are earning Playstation release-level Scalping money on these toys), have made it virtually impossible for the regular customers to buy them.
- Target exclusives – sold out on day 1. Restock still pending for 6+ months
- Hasbro direct – sold out
- Ebay – Holy moly… $$$$
- Hasbro's inability to rapidly produce at the start of COVID actually… helped. They got tons of market feedback, resulting in a re-paint on previously release character. People wanted a less cartoonish appearance, and more realistic color choices. This is a very Agile approach, and the results are incredible.
- Efficiency with the line – Instead of small and giant Joes, they have one Medium size 6" that is standard with EVERY OTHER LINE – Disney, Marvel, and more. The toybox just got a standard unit of measure. Even the freaking heads and hands are interchangeable!
- Small lineups in each wave – 2 to 6 figures in each push, careful planning, and using similar elements for future characters to reduce manufacturing turnarounds. Profits, baby!
- They were able to align toy plans with the delayed Snake Eyes film. See the action figures slated for October release.
But the best part that tells me they are about to make great strides is the response to scalpers, and news about major productions to meet demand coming soon.
Hasbro restocks just started to hit Walmart and other online sellers in the last couple of weeks, finally filling orders that have been queued up for some time.
Folks – we have not even hit the summer movies that are going to redefine GI Joe for the next generation. This demand hasn't even started to hit peak.
Ok – Hasbro doesn't operate in a silo. It thrives based on engaging with young people (and old Toys R Us kids who never grew up like me) based on intellectual properties from all forms of entertainment companies.
The first attempt at GI Joe was about as well received as the Hulk movies. Swing and a miss. But the cat was also out of the bag in both of those cinematic universes, and it hurt a bit.
Then came Iron Man. Iron man did not disown the previous, but it did choose to pave a new path forward. It was an incredible (pun intended) business decision, and we all saw how they defined the market for the last decade+.
Enter Paramount with Snake Eyes origins move, coming this July. This is the "Iron Man" of the Hasbro toy lines. GI Joe is about to level up, and we are going to see a huge wave of nostalgia as well as next gen kids who finally have the toy lines to match a modern play experience.
Amazon has Lady Jaye show lined up for Paramount as well. Its coming folks. Its getting real.
GI Joe/Transformers crossover movie? Still on the table for pre-production. And Transformers is due for a reboot too (Yes, time flies, but it has been a LOOONG time already).
The Rock? In for life still.
And with EACH OF THESE, a careful, lean, well engineered line of toys compatible with the rest in your toybox.
Paramount is about to get a LOT of attention for their IP in the next decade.
Current prices & Valuations
- Are these shorted stocks like we have seen in big plays on WSB?
- No. I do not believe these are the type of stock where we are sticking it to the hedge funds in any way. To be clear, I am a believer in QUALITY toys, and I just really really love what they are building together.
- Ok, so if they aren't shorted, are they undervalued today?
- Do some DD yourselves, and I would love to hear opinions, but I believe they are fairly priced now, and have a clear history of growth with the business as it stands today.
- HOWEVER! I strongly believe they are FAR underpriced compared to what will happen in July this year, through end of the year.
- I am also LONG on them beyond the growth I anticipate this year. 2023-2025 will yield even more movie properties relaunching that are going to EXPLODE demand for these goods, and create engagement for the far future entertainment offerings from Paramount.
- Everything on the market is overvalued… isn't it?
- Maybe. However, I suspect these two stock plays are low key to date. I don't believe they have been impacted by strong speculation that other stocks have seen in the market today.
- Company Financials
- You should look for yourself, but Hasbro is an extremely profitable company already. More tendies coming.
- Paramount – They've struggled in the past. This is why I really believe they have every intent to do this franchise launch RIGHT this time. They're building the partnerships needed to make this a serious comeback.
- Positions or ban
- I don't have much to spend. I am in HAS for 10 shares at $98.75 and PGRE for 100 shares at $10.65.
- I don't do Calls or Puts because I can't afford to lose everything. You do you!
- Yes, I plan to buy more constantly, as I can afford to add more to my positions.
Adults and kids want these action figures with more demand than we have seen since the mid 90's. Snake Eyes movie and GI JOE Amazon shows are going to explode toy demand, and Paramount is finally lined up to launch a true blockbuster entertainment franchise to turn into a major profitable entertainment company.
The last decade of toys were iterative engineering efforts, and the payout starts THIS YEAR on those investments.
Both companies are set to play well to each other's strengths, and surge demand for their toys and entertainment together.
Submitted April 30, 2021 at 10:56PM by IlliterateInvesting
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