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Why Mattel Shares Fell 19% in May

By Anders Bylund – Updated Jun 10, 2019 at 5:00PM

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The toy giant posted some wild swings as Washington hurled tariffs and trade-war warnings at some of the home countries of this company's most important suppliers.

What happened

Shares of Mattel (MAT 1.25%) dropped 19.2% in May, according to data from S&P Global Market Intelligence. The inveterate maker of toys and games suffered a double dose of worries surrounding American trade tensions with China.

So what

On May 13, the stock took a 5% haircut in a single day as the Trump administration boosted tariffs on goods imported from China to 25%. The stock took another 6% dive on the last day of the month, fueled by Trump's threat of starting another trade war with Mexico. China and Mexico happen to be important links in Mattel's supply chain, so it makes plenty of sense to see this stock suffering when politicians make it more difficult to do business across those particular borders.

A teddy bear, covered in bandages and band-aids, sits in a plain white field.

Image source: Getty Images.

Now what

When the Mexican trade war was averted in early June, Mattel's stock took to the skies with a 10% jump on the next trading day. These sudden twists and turns in its stock chart are likely to continue as long as Washington insists on playing tariff-powered games with international trading partners. For now, investors are looking back at a 32% value drop over the last 52 weeks.

Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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