In a new lawsuit filed in a federal court in Rhode Island on January 21st, Hasbro is accused of artificially inflating the Magic: The Gathering market between 2021 and 2023. As reported by Corey Plante at Polygon, shareholders Joseph Crocono and Ultan McGlone allege that Hasbro made “materially false and misleading” public statements during earnings calls in that time.
The 76-page complaint is almost completely about the overproduction of Magic cards and names Hasbro only as a nominal defendant. The aim at the company is less about money and more about transparency and accountability to shareholders. Crocono has held shares in Hasbro since 2020 and McGlone since 2021.
The suit names current Hasbro CEO Chris Cocks and former CEO Cynthia Williams along with other current and former board members. It claims that they’ve violated securities law, breached fiduciary duties, and lied to shareholders about Magic’s growth. The relevant period in the suit of September 2021 to October 2023 puts the introduction of many popular Universes Beyond sets right at the center of the suit’s claims. Chris Cocks has been a very vocal supporter of UB sets during financial calls.
Magic became a billion dollar brand in 2022, the same year that Bank of America warned that overproducing Magic cards was favoring short term success at the expense of long term devaluation in a financial report. The plaintiffs allege that Cocks and Williams misled investors by calling the overproduction a “segmentation strategy” designed to appeal to collectors, casual players, competitors, and MTG Arena players differently.
The biggest part of this is that the lawsuit alleges that this allowed Hasbro to overpay themselves by 55.9 million dollars when they repurchased 1.4 million shares for 125 million dollars in 2022. The suit claims that prices were artificially inflated due to overproduction of cards and claims that it was all part of the strategy.
The suit comes weeks before a February 10th earnings call that will discuss financial growth for the final quarter of 2025 as well as the year in total. So far, Hasbro has not responded publicly to the suit.
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