Hasbro finds itself in the courtroom crosshairs again, this time with a shareholder derivative lawsuit targeting CEO Chris Cocks and other top executives for what plaintiffs call a pattern of misleading investors about the health of its flagship Magic: The Gathering brand. The 76-page complaint, filed January 22nd, 2026, in U.S. District Court for the District of Rhode Island by shareholders Joseph Crocono (holding since 2020) and Ultan McGlone (since 2021), accuses the defendants of breaching fiduciary duties, unjust enrichment, waste of corporate assets, gross mismanagement, abuse of control, and violations of Sections 10(b) and 20(a) of the Securities Exchange Act along with Rule 10b-5.
At the heart of the claims is Magic: The Gathering, described in the suit as Hasbro's "most important line of products." The plaintiffs argue that executives repeatedly denied overprinting concerns during earnings calls and investor Q&As from September 2021 through October 2023, insisting that the new sets aligned with a "segmentation strategy" to meet demand from fresh consumer groups. In reality, they allege, Hasbro flooded the market with excess product to mask revenue shortfalls elsewhere in the company as a "Parachute Strategy" that propped up short-term numbers at the expense of long-term brand value.
The suit points to a pivotal November 14th, 2022, Bank of America report as the first crack in the facade. BofA analysts concluded Hasbro had been "overproducing Magic cards," doubling sales during the pandemic through more frequent releases, larger print runs, and wider distribution. This glut, they warned, was eroding collector confidence, causing distributors and local game stores to lose money on unsold inventory, and setting up future demand drops. Hasbro stock fell 9.9% the day the report surfaced.
The "truth" continued emerging later on in January 2023 with disappointing Q4 2022 results, Wizards of the Coast & Digital Gaming revenue missed guidance, prompting a 15% global workforce cut and the COO's departure and triggering an 8.1% stock drop. The final blow came October 26th, 2023, when Q3 results showed a 27% owned inventory reduction (34% in Consumer Products), with executives attributing it mostly to non-Wizards segments while downplaying Wizards issues. Plaintiffs claim these statements were "materially false and misleading," failing to disclose overprinting, problematic inventory management, market oversaturation, devaluation of existing cards, and weak internal controls.
The financial harm? From April to July 2022, Hasbro repurchased ~1.4 million shares for ~$125 million at allegedly inflated prices, overpaying by ~$55.9 million due to the misleading narrative, per the complaint. Drawing from internal documents, public filings, earnings calls, and former employee accounts, the suit seeks remedies for these breaches on behalf of the company.
Cocks faces particular scrutiny as the highest officer, accused of conscious disregard for oversight and controls. The complaint argues a majority of the board lacks independence due to interlocking relationships and liability risks, making a demand to sue futile.
The timing coincides with Hasbro's headquarters relocation from Rhode Island (after over a century) to Boston, though the suit stays in Rhode Island federal court. It echoes broader player frustrations that there is collector backlash over print volume diluting rarity, secondary market slumps, and perceived prioritization of short-term revenue over sustainability. Community reactions on Reddit's r/magicTCG and other forums mix schadenfreude ("finally someone sues them") with concern that prolonged litigation could distract from needed course corrections.
Hasbro has not yet publicly commented on the filing. As a shareholder derivative action, it aims to hold executives accountable for alleged harm to the company itself, not direct investor losses (though parallel securities class actions are referenced). With Magic remaining a cornerstone despite controversies, this lawsuit could pressure leadership on production strategy amid ongoing debates about set frequency and collector relations.
For now, it's another layer of scrutiny on a company navigating post-pandemic adjustments, workforce cuts, and IP challenges. Investors and players alike will watch closely for the next filing or response and whether this forces real change or fades into legal noise remains to be seen. Hopefully at the end of the day its a win for the players above all. Stay tuned to more information as we get it.