Potential Value Trap - Mattel Short
Updated
Mattel’s management has exerted great efforts over the past year to pull off a turnaround story in the company’s performance. The company released its box office hit movie, Barbie, in 2023 and expects the hit to be the catalyst for the turnaround. Despite the impressive effort and resulting success of the Barbie movie, I retain a bearish view on the stock and see the potential for a Value-Trap trade.
The above-mentioned media effects combined with the presence of a large distribution schematic on the stock’s Weekly chart suggest large scale operates are poised, inducing public interest in the stock, thereby engineering liquidity for a big move. Our bearish stance expects a significant markdown of the stock’s price in light of decreasing sales and earnings expectation.
In the second quarter of 2023, sales fell 12% from last year. So far, Mattel has hung on to gains from the Barbie movie and is up 22% this year.
The above-mentioned media effects combined with the presence of a large distribution schematic on the stock’s Weekly chart suggest large scale operates are poised, inducing public interest in the stock, thereby engineering liquidity for a big move. Our bearish stance expects a significant markdown of the stock’s price in light of decreasing sales and earnings expectation.
In the second quarter of 2023, sales fell 12% from last year. So far, Mattel has hung on to gains from the Barbie movie and is up 22% this year.
Note
Huge bearish reaction in response to third quarter 2023 earnings release.Take profit 1 hit - partial closed at imbalance fill. See link for data on earnings report:
msn.com/en-us/money/companies/mattel-mat-stock-down-despite-q3-earnings-revenue-beat/ar-AA1iTjNN
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