$400 million investment

Introduction

The Barbie movie is a $100 million production by Warner Brothers. It is not a kids' movie and stars Margot Robbie and Ryan Gosling. Mattel hopes that the movie will revive the brand's sales, which have been declining over the past decade.

Importance of Barbie to Mattel

Barbie accounts for one-third of Mattel's revenue, but its sales have been dropping as children move from dolls to playing games on their phones and tablets.

• A billion Barbie toys have been sold since 1959.

• The Barbie movie is the first ever built around one of Mattel's toy brands.

• There are 14 content projects in development at Mattel.

• If successful, the Barbie movie could be a new trend for Mattel.

Details about the Movie

The Barbie movie is not animated and stars Margot Robbie and Ryan Gosling. It will be released worldwide on July 21st.

• The budget for the movie is $200 million.

• The marketing budget for the movie is expected to be around $200 million.

• The timing of this movie could not be more perfect as it aligns with female empowerment movements.

• If successful, this could send Barbie sales stratospheric.

Potential Impact on Mattel

This section discusses how much money has been spent on making and promoting the film, how important it is for Mattel, and what impact it could have on their stock price.

• The Barbie movie is the biggest thing to happen to Barbie ever.

• Spending $400 million on a movie means that it will be difficult to recoup the money spent.

• If successful, this could be an absolute game-changer for Mattel and send Barbie sales stratospheric.

English Feedback on the Barbie Movie

In this section, the speaker reads feedback from a leaked screening of the Barbie movie. The feedback is positive and suggests that the movie will be successful.

Positive Feedback

• The screening feedback was leaked on Reddit.

• The feedback suggests that the movie will be visually iconic and Gosling's performance is his best yet.

• Will Ferrell's performance is also praised as being very funny.

• There is a big heart at the center of the movie which could lead to it winning Oscars.

• The movie recontextualizes Barbie for a new generation.

Concerns About Sales

• While there are positive aspects to the movie, there are concerns about whether it will sell dolls.

• Kids may not want to buy dolls, but parents might buy them for their children.

• This movie is clearly about female empowerment and focused on pleasing specifically females, probably moms who control purse strings.

Trading Opportunities

• There are two trades to consider:

• Trade 1: Will investors be excited about the possibility that this movie will essentially be a tailwind for Barbie sales post-release?

• Trade 2: Will the movie actually make people go out and buy Barbie dolls?

• If investors get excited before release, we'll likely see a pump running into July release date.

• Speaker bought Mattel stock because he believes in its potential.

Anticipation of the Barbie Movie

In this section, the speakers discuss the potential impact of the upcoming Barbie movie on consumer interest in Barbie dolls. They also talk about how search trends for Barbie dolls have risen in anticipation of the film.

Potential Impact on Consumer Interest

• The speakers believe that there will likely be a massive increase in consumer interest in Barbie dolls due to the release of the movie.

• The collectors have already seen some articles citing that a lot of the Barbie dolls related to this film are already starting to go up in value and have their sales volume going up.

Factors Affecting Sales

• The success of the movie is not necessarily tied to its opening weekend box office numbers, but rather how prolific it is and whether it is reviewed exceptionally well.

• The hype cycle building up to the release, including commercials, online advertising, and viral marketing campaigns like poster generators, could drive additional sales even if people do not see it in theaters.

The Appeal of the Barbie Movie

In this section, the speakers discuss why they think the timing for a movie like this could not be more perfect for America and much of the world.

Escapism and Cultural Relevance

• The speakers believe that this movie is an ultimate escapism movie that everyone is yearning for right now as there seems to be a dark cloud over society since close of pandemic culturally politically.

• This type of movie could provide complete escape from reality which makes it appealing especially during these times.

Positive Vibes

• They think that despite all odds with each other everybody seems to be fighting all time there's like a dark cloud over the world and this movie is so plastically like sunny and just like fun.

• The speakers believe that the timing could not be more perfect for America and much of the world, as it provides a positive vibe in a time when people need it most.

Budget and Production

In this section, the speakers discuss the budget and production of the Barbie movie.

Production Budget

• The production budget for the film is estimated to be around $100 million according to some sources.

• Other sources suggest that it has a $200 million dollar budget.

Box Office Expectations

• To recoup their costs, they would need to have a banger opening weekend with projections currently at 30 or 40 million dollars which is good but not great.

• It's hard to project opening weekend on a film like this because it's just so different from other movies.

Mattel's Barbie Movie and Inventory Issues

In this section, the speakers discuss Mattel's upcoming Barbie movie and how it could impact the company's revenue. They also mention Mattel's recent inventory issues and how they have affected the company.

The Barbie Movie

• The speakers believe that the upcoming Barbie movie is going to be viral and perfectly timed for holiday season sales.

• They think that Matchbox is still hot, which is good news for Mattel since it is their second biggest revenue line.

• Mattel recently got the Disney license back for dolls, which has helped them secure a top spot in Amazon's best-selling dolls list.

Inventory Issues

• The speakers mention that Mattel has had a massive inventory issue in recent quarters, including doll inventory, which has caused them to mark down all of their excess inventory.

• It has taken multiple quarters for Mattel to get through this inventory issue, but they have come out and said that it will soon be fixed.

• The speakers note that Mattel lowered their projections for full-year 2023 due to these issues but maintained guidance last quarter. However, expectations are now reasonable.

Risks Associated with the Barbie Movie Release

In this section, the speakers discuss some of the risks associated with holding a long position in Mattel through the release window of the upcoming Barbie movie.

Potential Political Messaging

• One speaker mentions that there could be some trans political messaging in the film due to Hari Neff being a trans model who appears in it. This could pose a risk to the movie's success.

• The other speaker jokes that as long as Kid Rock was not the target audience for buying a Barbie doll, it should be okay.

Uncertainty Surrounding the Movie

• The speakers note that there is some uncertainty surrounding the movie's success since it is trying to collide the fake plastic world of Barbie with the real world in some way. Depending on how this is done, it could go well or poorly.

• They also mention that there are some social commentary and political elements in the movie, but reviews suggest they are not heavy-handed.

Follow-Up Show

• The speakers plan to have a follow-up show after the release window of the Barbie movie to discuss whether holding a long position in Mattel through this period was worthwhile or not.

Political Undertones in the Film

The speakers discuss the political undertones of the film and its target audience.

Target Audience

• The movie is targeted towards an older demographic with daughters, particularly millennial moms with young daughters.

• The film incorporates different styles and types of Barbies from different eras, appealing to a nostalgia moment.

Political Issues

• The film focuses on female political issues, which may have political undertones.

• As men, the speakers acknowledge that they are not allowed to complain about these issues.

Nostalgia Moment for Barbie

The speakers discuss how nostalgia plays a significant role in the hype surrounding the movie.

Nostalgia Kick-In

• There is a push back towards nostalgia due to people's fear of technology and AI.

• The incorporation of different styles and types of Barbies from different eras appeals to this nostalgia moment.

Hype Surrounding Movie

• The screenplay has received high praise from one of the actors who read it, calling it one of the best screenplays ever written.

• Early screenings have also received positive feedback, indicating that it could be an excellent movie overall.

Mattel and Hasbro Partnership

The speakers discuss how Mattel and Hasbro will benefit from their partnership.

Partnership Details

• Mattel has given Barbie to Hasbro for a Barbie Edition Monopoly game while Hasbro has given Transformers to Mattel.

• Both companies will benefit from the partnership, not just Mattel.

Oppenheimer vs Barbie

The speakers discuss the release of two movies, Oppenheimer and Barbie, which are coming out on the same day. They talk about the social media war between the two movies and how it might lead to a cultural phenomenon.

Cultural Phenomenon

• There has been a social media viral war of Oppenheimer versus Barbie.

• The entire world might go to the theater because it's become this cultural thing that revolves around the release of these summer movies.

• It might end up being one of these things where couples fight over which movie to see.

• Search traffic for "Barbie doll" is already up, and we are still way in front of the movie release.

Impact on Barbie Sales

The speakers discuss whether or not the success of the movie will translate into sales for Mattel's Barbie brand.

Increase in Sales

• Barbie sales went through the roof during the pandemic.

• The dolls have been hot during the pandemic, and they overproduced when it stopped. Now they're kind of coming off that but Barbie might reignite what was already a Hot Doll Market.

• We're looking at somewhere between half a billion and a billion dollars of exposure globally for the Barbie brand.

Brand Awareness

• Major actors like this bring attention to the Barbie brand that hasn't been there in decades.

• Matchbox is literally one of the cheapest toys on Earth, still selling at 1970 prices.

Concerns and Optimism

The speakers discuss their concerns and optimism about investing in Mattel's Barbie brand.

Concerns

• The stock market is volatile, and there are debt ceiling issues.

• Discretionary toy companies are the worst types of brands to be in during a deep recession.

Optimism

• There is a new base of momentum from the pandemic, and search traffic for "Barbie doll" is already up.

• Major actors bring attention to the Barbie brand that hasn't been there in decades.

• We're looking at somewhere between half a billion and a billion dollars of exposure globally for the Barbie brand.

The Barbie Doll and the Stock Market

In this section, the speakers discuss the cost of making a Barbie doll and how it relates to the stock market. They also talk about the inventory issue that caused a drop in stock prices.

The Cost of Making a Barbie Doll

• A Barbie doll costs around 16 dollars on Amazon.

• The actual cost of making a Barbie doll is very cheap, probably around 50 cents for the molded plastic.

• The clothes for the dolls are worth another quarter or so.

• For collectors, keeping the dolls in their boxes is important.

Inventory Issues and Stock Prices

• The stock price being down can be seen as positive because it means there is potential for growth.

• The reason for the drop in stock prices was due to an inventory issue that is being worked through.

• Wall Street tends to be short-term minded and sells off stocks when they see problems that will last for a few quarters.

• This problem with inventory is expected to be resolved soon, which could lead to an increase in stock prices.

Investing in Mattel

• There is potential for profit by investing in Mattel before everyone else starts talking about it.

• It's important to get into this trade before hype cycle starts and people start talking about it more frequently.

• Q2 earnings call could reveal interesting things about Barbie sales from Mattel.

Transitioning from Novo Nordisk to Eli Lilly

In this section, one speaker discusses transitioning from Novo Nordisk to Eli Lilly due to data showing better results with Eli Lilly's product.

Transitioning from Novo Nordisk to Eli Lilly

• Data shows that Eli Lilly's product has resulted in significant weight loss compared to Novo Nordisk's product.

• There may be hype going into the end of the year when Eli Lilly's product starts being utilized more for weight loss.

• Novo Nordisk is expected to sell everything they can, but right now, Eli Lilly seems like a better investment option.

Hedge Fund Trading Strategies

In this section, the speaker talks about his trading strategies and how he manages risk.

Conservative Trading Strategies

• The speaker's trading strategies have become more conservative as he has aged.

• He generally avoids out-of-the-money options and focuses on in-the-money options.

• The riskiest trades he makes these days are at-the-money options.

Market Volatility

• The speaker believes that it is risky to trade options in the current market due to its volatility.

• Even if a particular trade is successful, a market downturn could cause everything to come down with it.

Conclusion and Teaser for Future Episodes

In this section, the speakers wrap up their discussion and tease future episodes.

• The speakers conclude their discussion on Mattel and Barbie.

• They mention that they are working on some other good stuff and may release another episode later in the week.

• They encourage viewers to subscribe, hit the notification bell, and like their content.

• They also mention that listeners can find a podcast version of their show for those who prefer audio content.

• Finally, they reiterate that viewers should not copy their trades but instead do their own research before investing.