MarvelCaseStudy_521

MarvelCaseStudy_521 - Marvel Case Study Marvel...

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1 Marvel Case Study Marvel (background): Marvel capitalized on the speculative frenzy in comic book and trading card market in the early 1990s, however both markets crashed during the mid 1990s Baseball and hockey strikes unforeseen (depressed trading card market) development of alternative forms of entertainment (such as video games) occurred rapidly and somewhat unexpectedly suggests bad luck played some role in Marvel’s demise
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2 Operating/financial decisions also played a role in Marvel’s demise Are there sound economic reasons for combining different forms of youth entertainment? Even if the answer is YES, can question the implementation. ! Bought companies at a substantial premium (e.g., Skybox acquisition in 1995 even after the trading card market had turned south) ! “strip mining” its existing comic book business by proliferating comic book titles, thus over-saturating the market Most of Marvel’s acquisitions were cash financed (Marvel assumes risk of merger as well as heavy interest burden) Marvel issued $894 million in public debt all of which comes due in April 1998 (severe refinancing problem down the road)
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3 Increased debt load took its toll on the company
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This note was uploaded on 01/02/2012 for the course FINANCE 347 taught by Professor Bayou during the Fall '11 term at NYU.

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MarvelCaseStudy_521 - Marvel Case Study Marvel...

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