txlaw Posted January 14, 2013 Posted January 14, 2013 http://www.npr.org/blogs/money/2012/12/13/167055503/why-legos-are-so-expensive-and-so-popular
warrior Posted January 16, 2013 Posted January 16, 2013 Txlaw ,Good peace ,thanks... In 2005-2007 Mega gained market share on the expense of Lego. The bad purchase of Rose Art stopped the momentum for MB. In boys construction category Mega is the second after Lego, however Lego is huge, I believe it is about 90% of market share. Lego has brand recognition, economy of scale ect…in retail they are indeed # 1. FFH invested into MB via debentures, common and warrants ,at the present moment FFH has big peace of business and the board seat .( and I keep thinking that FFH should just buy them all. what do you think?) In seems to me that MB has been gaining back what they had lost. From my point of view, valuation is attractive.
txlaw Posted January 16, 2013 Author Posted January 16, 2013 Txlaw ,Good peace ,thanks... In 2005-2007 Mega gained market share on the expense of Lego. The bad purchase of Rose Art stopped the momentum for MB. In boys construction category Mega is the second after Lego, however Lego is huge, I believe it is about 90% of market share. Lego has brand recognition, economy of scale ect…in retail they are indeed # 1. FFH invested into MB via debentures, common and warrants ,at the present moment FFH has big peace of business and the board seat .( and I keep thinking that FFH should just buy them all. what do you think?) In seems to me that MB has been gaining back what they had lost. From my point of view, valuation is attractive. I have no idea on MB -- I've never done an analysis. Would love to get more detail on why you think MB valuation is attractive right now.
cwericb Posted January 17, 2013 Posted January 17, 2013 There has got to be money in this field. Last month when I went to pick up a couple of Lego sets for my Grandson at Christmas I was floored when I saw that many of the sets were priced in the $3-400 range!
warrior Posted January 17, 2013 Posted January 17, 2013 We do not own MB, however, we might initiate the holdings warrants / common in the future. The reason I keep my eye on MB that FFH invested into …We own FFH and it is interesting to know what Prem and Co. buying and selling and what is the rational. It seems that the strategy FFH used with MB is similar to Brick -which works very well for FFH and Francis Chou, in both cases turnaround plan, issue of debentures , warrants ,common to p/o debt. In fact, MB has been making big progress, the construction category performing very well, margin is expending, expenses had been reduced and well controlled. Approximate EBITDA estimate close to $55mil. I see huge gain in the store shelf. (Walmart, Target). They have new license with Mattel, in particular “Barbie construction toys for girls “, it is very competitive product , my daughter confirmed that the Barbie-Mega Brands is better than Lego-friends. The Second segment of MB is a Stationery /Art category - sales are up, margin is improving and I believe this is the first year since they bought them, MB has a positive cash flow from the segment. They paid close to 400mil $USD in 2005 to buy Rose art ( please note that today market cup of MB around $180milCAD ) .the Interesting fact is that they tried to sell the stationary in 2008 – when time was bad , but the price was low, so they kept it . Idea of selling the segment today…? well, would certainly unlock the value. the interesting part that the balance sheet is better than it looks. approx 12.2mil warrants outstanding are in the money ( the exercise price close to 10$) when converted will be used to pay off debentures. I spoke with management- and they confirmed that. On a negative side, business is a mediocre, in highly completive industry, to compete company needs to come up with new products and licenses. they do not have a strong brand recognition like Craoyla in stationary and Lego in construction category thus there is always a chance for an improvement… Cheers!
siddharth18 Posted February 2, 2013 Posted February 2, 2013 What's the story behind Mega Bloks? Turnaround in progress?
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