Lawsuit claims Hasbro misled investors about Magic: The Gathering cards

A suit filed by shareholders on Jan. 21 makes a number of claims regarding the public representation of card sales

A shareholder lawsuit filed in Rhode Island federal court accuses Hasbro executives of misleading investors about the health and sustainability of Magic: The Gathering, the company’s most important and lucrative brand. The lawsuit, which arrives just weeks before Hasbro’s Feb. 10 earnings call, is less about Universes Beyond or Secret Lairs — which are both seen as controversial by some of the game’s fans — and more about how Hasbro framed Magic’s growth to Wall Street, particularly related to concerns that cards were being overprinted.

Filed Jan. 21 as a verified shareholder derivative complaint, the lawsuit names Hasbro CEO Chris Cocks, former Wizards of the Coast president Cynthia Williams, and multiple current and former board members. The plaintiffs allege breaches of fiduciary duty, securities law violations, unjust enrichment, and gross mismanagement tied to Hasbro’s investor disclosures between September 2021 and October 2023. The core argument is that company leaders misled investors about the risks associated with Magic’s growth and made public statements that were “materially false and misleading” on earnings calls between 2021 and 2023. The plaintiffs in the suit are Joseph Crocono and Ultan McGlone, who say they’ve held shares of the company since 2020 and 2021, respectively.

Hasbro is named as a nominal defendant, which means that these shareholders are suing executives on behalf of the company itself, and any financial damages get paid back to Hasbro. As such, the aim of the suit is to compel transparency and accountability.

The filing focuses almost exclusively on Magic and its importance to Hasbro at large. According to the complaint, Wizards of the Coast met its goal of doubling revenue in 2021 well ahead of schedule, and that same year, Wizards generated $547 million of Hasbro’s $763.3 million in reported operating profit. Magic alone accounted for roughly 15 percent of Hasbro’s total net revenue in 2021, before becoming the company’s first billion-dollar brand in 2022.

The suit claims that Hasbro executives publicly downplayed concerns that Magic cards were being overprinted. By creating a volume of product that exceeded consumer demand, the suit alleges the company decreased the value of existing product.

Executives, including Cocks and Williams, consistently described Magic’s growth as the result of a “segmentation strategy,” making the claim that new products were designed to serve different audiences, namely that collectors, competitive players, casual players, and digital users want to purchase different things.

The plaintiffs allege those assurances were misleading. According to the filing, internal data and inventory trends showed Magic products were being printed faster than consumers could purchase them, creating risks that the suit alleges were not properly disclosed to investors. The lawsuit also points to earnings calls and SEC filings in which executives attributed rising inventory levels to timing issues around upcoming releases rather than an excess of supply outright.

The complaint further alleges that these statements allowed Hasbro to repurchase approximately 1.4 million shares for $125 million between April and July 2022 at artificially inflated prices, resulting in an estimated $55.9 million overpayment.

The filing notes two key moments in the ongoing narrative: In November 2022, a Bank of America analyst report warned that an oversupply of Magic cards was “destroying the long-term value of the brand.” Hasbro’s stock fell roughly 10 percent. Then, in October 2023, Hasbro spent $50 million to move and market inventory as an “obsolescence cost” (according to COO Gina Goetter at the time). This seemingly led to another sharp drop in stock price. The suit argues the risks associated with these disclosures should have been communicated earlier.

The suit establishes Sept. 2021 to Oct. 2023 as the “relevant period” in question. This time period predates some of Magic’s most explosive growth, attributed particularly to Universes Beyond crossover sets. A popular figure pointed out by Chris Cocks in an earnings call last year noted that the Lord of the Rings set released in June 2023 took six months to generate $200 million in revenue, whereas June 2025’s Final Fantasy UB set earned $200 million in a single day. Since the suit focuses so much on how Magic: The Gathering’s growth has been publicly framed by Hasbro executives, Universes Beyond has become an increasingly prevalent part of that discussion.

The lawsuit lands at an awkward moment for Hasbro. On Feb. 10, the company will host an earnings call where executives are expected to again discuss Magic’s growth, inventory management, and long-term strategy. While the case remains in the very early stages and Hasbro has yet to issue any kind of public response, it still puts pressure on the company and its executives to rethink how the earnings call public forum is used.

The lawsuit serves as a reminder that the language executives use to describe Magic’s growth carries real consequences, especially for a brand that has only become bigger and more lucrative for Hasbro in the years since the specific period currently under scrutiny.

Polygon reached out to Hasbro via email for comment, but did not hear back by the time of publication.