Mattel Shares Rise Amid Renewed Rumors of CEO Barad’s Removal

Shares of battered toy giant Mattel Inc. rose almost 14% Wednesday as Wall Street buzzed with rumors that the El Segundo company’s board plans to meet today in New York, possibly to remove Chief Executive Jill E. Barad.

Mattel shares closed at $11.81, up $1.44 on the New York Stock Exchange as 7.5 million shares changed hands, the heaviest volume since October.

The stock last month hit a 52-week low of $10--far off its 10-year peak of $46.75 in 1998.

Barad, reached at a hotel in New York on Wednesday, declined to comment.

“I have reason to believe there is a meeting and I would suspect that the board would want to talk about the situation at the Learning Co.,” said toy industry analyst Sean McGowan of Gerard Klauer Mattison in New York, referring to the software maker Mattel acquired last year.

But “it would be surprising to have a leadership change” with the toy industry’s largest trade show just a few weeks off, he said.

Some investors began clamoring for Barad’s removal more than a year ago, after troubles during the 1998 crucial holiday season compounded the company’s, and industry’s, malaise.

That sentiment picked up steam late last year when the company caught investors off guard with an announcement of a major hit to its third-quarter earnings. Mattel later elaborated on that warning with word that earnings would slide 42% for the quarter.

At the time, Mattel blamed its problems on Learning Co., which it said would lose $105 million for the quarter--far off Mattel’s original estimate of a $50-million profit.

News about Learning Co.’s problems, however, came in pieces, leading analysts to suggest that the worst might not be over for Mattel’s newest addition.

At the least, Wall Street observers said, today’s board meeting might be to discuss the Learning Co.’s balance sheet in advance of next week’s official release of fourth-quarter earnings.

Investors had originally speculated that if Barad wasn’t removed early in January, she likely would last through this month and the all-important New York Toy Fair, when manufacturers show retailers, analysts and investors their best offerings for the 2000 holiday season.

But on Wednesday, some of the company’s shareholders suggested that a change might happen now as a precursor to inaugurating a new leader at the big industry meeting. Speculation about a successor has been almost as rampant as the rumors about Barad being forced out.

Among the oft-talked about possible successors is Bernard Stolar, who last month was tapped to head the company’s $1-billion interactive division. In January, Mattel chose Stolar, the former president and chief operating officer of Sega of America Inc., to provide new direction for Learning Co., among other pieces of Mattel’s technology business. Before Sega, Stolar worked for Sony Computer of America, as part of the team that introduced the Sony Playstation.

Stolar, reached in New York on Wednesday, declined to comment.

Toy industry experts also have suggested that Disney executive Paul Pressler, who built Disney’s retail stores into a national player earlier this decade, would be a good candidate. Pressler ran Disneyland until late last year and now heads the company’s theme park unit, its most profitable. He could not be reached for comment Wednesday.