Mattel shares rebound after Authentic Brands acquisition reports

Mattel, Inc. (NASDAQ: MAT) shares rebounded in late October following a Wall Street Journal report that Authentic Brands Group is interested in acquiring the toy manufacturer for more than $20 per share. The company closed at $16.99 on October 20, 2026, with a market capitalization of $4.85 billion. Longleaf Partners, a fund managed by Southeastern Asset Management, identified the stock as a material contributor to its returns during the month, noting that the price recovery followed earlier softness in the third quarter.

The rebound occurred after a period of leadership transition and guidance concerns at Mattel. Ynon Kriez announced his departure from Mattel on September 29 to become co-CEO at Skydance. Roger Lynch, Mattel's lead director, was immediately named as the new CEO. Prior to these changes, Mattel management indicated at a mid-September conference that 2026 guidance would be more back-end weighted, a statement that contributed to the stock's decline in the quarter. The stock posted a 14.36% year-to-date pullback, trading within a 52-week range of $12.40 to $22.48.

Beyond the Authentic Brands interest, additional shareholder pressure has emerged. Reports indicate that material holder Ariel has increased pressure on the company, and published rumors suggest Zuru, a toy company headquartered in Asia, is also interested in Mattel. Longleaf Partners stated that it remains engaged with the company amid these developments.

The fund's third-quarter 2026 investor letter for its "Partners Fund" reported a return of 2.41% for the quarter and -3.15% year-to-date. These figures compared to 2.30% and 12.75% for the S&P 500, respectively. The fund's three-year annualized returns were 11.7% coming into the year. Management noted that while macro factors including higher interest rates impact the market, financially strong investments are expected to endure. The firm believes company values perform better than stock prices and that earnings multiples have decreased, presenting opportunities despite current frustrations.

According to Insider Monkey data, 41 hedge fund portfolios held Mattel at the end of the second quarter, an increase from 40 in the previous quarter. The data provider noted that while Mattel has potential, certain AI stocks offer greater upside potential and carry less downside risk.