Here's the bigger story. THQ (NASDAQ: THQI), which is involved in a joint venture with JAKKS Pacific to exploit a World Wrestling Entertainment (NYSE: WWE) video-game license, pinned its partner to the mat with some arbitration relating to the venture. Now that THQ has won this battle, JAKKS Pacific will see a reduced royalty rate on those gaming products.

That isn't good news. When you couple this loss with what appears to be a deteriorating set of fundamentals with the company's operations, shareholders should naturally feel some worry.

Now, I fully admit, the following could be crazy talk considering the quality of the Q2 numbers. But I'll throw it out anyway: Does it strike you that JAKKS Pacific might be a speculative buy? Why do I say this? Well, I'm wondering if all the bad news is priced in. The 52-week low on the stock is $10.17. Shares closed at $11.70 at the end of Tuesday's normal session. But the shares were trading at $10.86 in the after-hours market.

That's a big drop compared to the regular-session close, but my gut is telling me that maybe JAKKS Pacific might drop a little further and then rebound now that the report is out and the arbitration has been decided (in fact, it headed higher after the opening bell this morning). I could be wrong. Nevertheless, JAKKS Pacific has rebounded from 52-week-low points in the past.

No matter what, JAKKS Pacific is not doing well. So you have to be careful with it. It is neither Hasbro nor Mattel. It is, I'll say again, a speculative trade. Don't do anything now. Sit back and watch the price action a little. See what the market might be saying about the company's prospects. Then decide ...

Disclosure: I don't own any company mentioned; positions can change without notice.