Continue reading Mattel's third toy recall: Parents response ho-hum, could Barbie survive?

Mattel's third toy recall: Parents response ho-hum, could Barbie survive? originally appeared on BloggingStocks on Wed, 05 Sep 2007 13:07:00 EST. Please see our terms for use of feeds.

Every time investors turn around, things get worse at Mattel (NYSE: MAT). The Wall Street Journal (subscription required) reports that the federal Consumer Product Safety Commission requires companies to "report all claims of potentially hazardous product defects within 24 hours." Mattel apparently has not been doing that. The company took several months to review data on the nearly 18 million play sets that it recalled last month.

The CPSC says that it has had about enough of Mattel's behavior. The commissions chairperson calls Mattel's approach "fallacious and wrongheaded."

Although the commission is fairly small and cannot handle all of the cases that it should, it is astonishing that Mattel would makes its position with consumers worse by adopting a stance that might be viewed as irresponsible.

Continue reading Mattel (MAT) gets investigated

Mattel (MAT) gets investigated originally appeared on BloggingStocks on Tue, 04 Sep 2007 08:45:00 EST. Please see our terms for use of feeds.

Continue reading Killer bibs! Is recall madness just anti-Chinese sentiment?

Killer bibs! Is recall madness just anti-Chinese sentiment? originally appeared on BloggingStocks on Wed, 15 Aug 2007 20:00:00 EST. Please see our terms for use of feeds.

In an effort to better understand the lead-in-toys scandal, I had a chance today to talk to an industry expert on the topic. Dr. Marcia Stone holds a Ph.D. in Organic Chemistry and is Founder/President of Hybrivet Systems, a manufacturer of lead-testing equipment for industry and home use. She has worked in the lead testing field for 15 years.

I asked Dr, Stone why manufacturers would use lead paint? She explained that "Lead in paint provides a hard, glossy, pretty finish, the reason it was once used extensively in expensive housing. Leaded paint is also easy to work with and inexpensive."

What lead-containing products have you found on American shelves that consumers should be concerned about?
"The scandal over lead in children's jewelry is not over; we continue to find these products for sale," said Stone. She told me manufacturers will use a core of lead in cheap jewelry and cover it with nickel plating or paint, or use a solder containing lead in its construction. Children often chew on their jewelry, and as little as three milligrams of lead, about the size of three grains of sugar, can kill a child. Since lead has a sweet taste, the propensity for children to ingest it is even greater.

Continue reading An expert's view of the lead-in-toys scandal

An expert's view of the lead-in-toys scandal originally appeared on BloggingStocks on Wed, 15 Aug 2007 18:01:00 EST. Please see our terms for use of feeds.

It's been a few weeks since Mattel, Inc. (NYSE: MAT) announced a million-toy recall, and the dust is far from settled. The Chinese supplier that supplied paint for a huge collection of children's toys has seen its CEO commit suicide and parents are still under the gun on which exact toys to trust their kids with. The problem is lead-based paint, which can lead to health complications. Outside of the normal "small parts" recall fiascos that seem to happen every year, the lead paint issue is a big one. Young kids put everything in their mouths.

This week, Mattel has -- once again -- urged parents to withhold many of its toys from all those curious kids. When a toy manufacturer directly tells customers to not use its products, something is amiss, of course. With more than 19 million toys worldwide under scrutiny, how did this problem become so large before being detected?

Quality control in China -- with raw materials and product manufacturers -- has slid far, far downhill. Retailers carrying items from multiple Chinese-based recalls may be feeling the backlash, and the American consumer is probably going to demand better in the near future. In other words, if "low prices" means "horrible quality," where does that leave discounters like Wal-Mart Stores, Inc. (NYSE: WMT) and Target Corp. (NYSE: TGT)? With plummeting toy sales, most likely. Is that priced into the stock of either retailer? Probably not.

Continue reading Mattel (MAT) toy recall madness continues to escalate

Mattel (MAT) toy recall madness continues to escalate originally appeared on BloggingStocks on Wed, 15 Aug 2007 11:00:00 EST. Please see our terms for use of feeds.

Mattel (NYSE: MAT) volatility Elevated at 39 into Voluntary recall. MAT announced the voluntary recall of 18 million products. BMO Capital Markets says, "We believe this recall will adversely affect consumer behavior, resulting in lower sales for the line. MAT closed at $23. MAT September option implied volatility of 36 is above its 26-week average of 26 according to Track Data, suggesting larger risk.

Moody's (NYSE: MCO) September implied volatility Elevated at 58. MCO, a provider of credit ratings, research and analysis covering fixed income securities closed at $49.98. The Wall Street Journal Online carried the headline "How rating firms' calls fueled Subprime Mess. Benign view of loans helped create bonds, led to more Lending." MCO September option implied volatility of 58 is above its 26-week average of 39 according to Track Data, suggesting larger fluctuations.

Continue reading Option update 8-15-07: Mattel (MAT) toy recall raises volatility

Option update 8-15-07: Mattel (MAT) toy recall raises volatility originally appeared on BloggingStocks on Wed, 15 Aug 2007 09:50:00 EST. Please see our terms for use of feeds.

Continue reading Go bearish on Mattel (MAT) after expanded recall

Go bearish on Mattel (MAT) after expanded recall originally appeared on BloggingStocks on Tue, 14 Aug 2007 11:15:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• Mattel Inc (NYSE: MAT) is expected to soon announce another recall of toys made in China, reported the Wall Street Journal.
• Merck and Co. Inc (NYSE: MRK) CFO Judy Lewent sold 200K shares for $10.3M from July 26 through Aug. 7, at an average price of $51.31 per share, reported Barron's Online's "Inside Scoop" column.
• The Royal Bank of Scotland (OTC: RBSPY)-led consortium seeking to purchase Dutch bank ABN Amro Holdings NV (NYSE: ABN) raised its stake in ABN to more than 3% between Friday and Monday, reported the Financial Times.

• The Independent reported that Barclays' (NYSE: BCS) bid for Dutch bank ABM Amro was approved by the Netherlands' Ministry of Finance yesterday.
• A highly publicized civilian nuclear deal with the U.S. still allows India to test nuclear weapons, according to Prime Minister Manmohan Singh, reported the Associated Press.

Newspaper wrap-up: Mattel (MAT) to recall more toys originally appeared on BloggingStocks on Tue, 14 Aug 2007 09:15:00 EST. Please see our terms for use of feeds.

Before the bell: MAT, NOK, YHOO, GOOG, BRCM, QCOM originally appeared on BloggingStocks on Tue, 14 Aug 2007 08:30:00 EST. Please see our terms for use of feeds.

In a saga that has everything from toys with lead to the suicide of a manager who ran a factory that allegedly made some of the tainted toys, add yet another recall. Mattel (NYSE: MAT) has already recalled about one million toys, and, according to (subscription required) The Wall Street Journal, it is about to recall several hundred thousand more. The Journal writes:: "One of the recalled items is a die-cast car that may contain lead paint."

Mattel said it would take a $30 million charge for the first recall.

Lost in much of this is what will happen to Mattel's business. The recall costs may be modest compared to the company's $5.7 billion in annual revenue. But, it took two or three years for the big toy company to turn around after a sharp fall in sales of it Barbie line flat lined the stock from 2002 to 2005.

In July 2006, Mattel's stock traded for $16. Improved financial results from a stronger product line took the shares to almost $30 this April But, the stock has moved down to the low $20s. Watch it fall further if the China toy problem gets any worse.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Click here for Mattel toy recall coverage

Brian White: Mattel (MAT) toy recall madness continues to escalate
Paul Foster: Option update 8-15-07: Mattel (MAT) toy recall raises volatility
Beth Gaston Moon: Mattel (MAT): Looking into the latest recall
Brent Archer: Go bearish on Mattel (MAT) after expanded recall
Michael Fowlkes: Chinese executive found hanged following Mattel (MAT) toy recalls
Hilary Kramer: Mattel, Inc. (MAT): Buy or sell after recall?
Tom Taulli: Mattel toy recall: Lessons for business owners
Julie Tilsner: Fisher-Price to recall one million toys made in China
Douglas McIntyre: Mattel dogged by China problem

Mattel (MAT) toy recall: More to come? originally appeared on BloggingStocks on Tue, 14 Aug 2007 08:00:00 EST. Please see our terms for use of feeds.

Continue reading Mattel, Inc. (MAT): Buy or sell after recall?

Mattel, Inc. (MAT): Buy or sell after recall? originally appeared on BloggingStocks on Thu, 09 Aug 2007 11:35:00 EST. Please see our terms for use of feeds.