You can see how the hedge funds got Hasbro (HAS) wrong. You can see that they didn't believe in the transformation. They figured that, in the end, Hasbro was just another company that sold into the mall, another Newell Brands (NWL) , another Hanesbrands (HBI) , another Under Armour (UA) , another whatever.
They didn't get that Hasbro saw that you had to be an entertainment company that sold toys and games. You had to make your own content, as they are doing right now with My Little Pony, which Lionsgate will be debuting in November. You had to create studios and create games.
You had to do anything but sit there and get beaten like everyone else who sells into Target (TGT) or Walmart (WMT) or Macy's (M) or Kohl's (KSS) .
Things happened so fast it was hard to see coming. The money that Hasbro spent on creating an entertainment company that tells stories that have merchandise attached to them got lost on people, hence why the stock got hammered the previous quarter.
But the payback was swift. And it might be lasting.
When we think about companies that supply into mass merchants and discounters and department stores going forward, we are going to have to think about those that took it, like Mattel (MAT) , and those that said we have to reinvent, like Hasbro, and we have to get long the latter and say goodbye to the former.
You simply can't be a company that makes merchandise that can be sold in a traditional way, just like you can't be a seller of traditional merchandise any more. There has to be, to use Hasbro's term, a story to be told.
Without it? You have a stock that would have gone down 10 points instead of up 11.
