Carl Icahn Unloads Yahoo Stock, Buys Mattel Shares

5:59 PM PST 11/16/2010 by Paul Bond, Georg Szalai

One analyst guessed the investor might try to influence the way the toymaker has been handling an expensive lawsuit with MGA Entertainment over the Bratz brand.

 

Carl Icahn, the activist investor who has been focused on Lionsgate and MGM of late, has dumped his Yahoo stock and purchased shares of Mattel, maker of Barbie, Ken and Hot Wheels.

Icahn's stake in Mattel was revealed late Monday, and Tuesday the toymaker said it was raising its annual dividend 11% to 83 cents and that it would begin paying its dividend quarterly instead of annually.

The company also said it was increasing by $500 million the amount of shares it can buy back. Since 2003, the company has purchased $2.3 billion worth of its own shares.

Whether Icahn's interest in Mattel had anything to do with the company's announcement wasn't clear Tuesday, but investors viewed all the developments positively. On a day when the Dow and Nasdaq tumbled nearly 2% apiece, Mattel shares were up more than 3%.

Stifel Nicolaus analyst Drew Crum called Mattel's actions "aggressive" and said that "it's possible" they were a response to Icahn's purchases.

The analyst guessed that Icahn might try to influence the way Mattel has been handling an expensive lawsuit with MGA Entertainment over the Bratz brand. MGA says Barbie has copied some Bratz features and Mattel counters that the creator of Bratz was a Mattel employee when he developed the line of dolls.

Crum also says Icahn might want Mattel to be more aggressive in developing multimedia strategies for its brands, like Hasbro with its movie and TV initiatives.

Icahn, through his Icahn Capital, purchased 2.4 million shares of Mattel. The shares represent less than 1% of the public float and was worth $58.1 million Tuesday based on the stock's closing price of $24.22.

Paul Bond reported from Los Angeles; Georg Szalai reported from New York.

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