What happened

Pity Mattel (MAT 3.16%). First came the short report. Then came the whistle-blower report. Now Mattel has apparently become so unpopular that it can't even get its biggest rival to put it out of its misery.

As we learn today on TheFly.com, investors have been hoping that beleaguered Mattel might ultimately end up getting rescued by a buyout from archrival Hasbro (HAS 1.14%). Instead, Hasbro has announced that it will be spending $4 billion to acquire Entertainment One -- a company I'll bet you'd never even heard of before this announcement (it makes animated TV series Peppa Pig and PJ Masks).

Mattel stock is down 6.6% on the news as of 12:50 p.m. EDT.

Red arrow crashes into floor.

Image source: Getty Images.

So what

The $4 billion cash-purchase price Hasbro is paying for Entertainment One is significant in two respects. First, it's kind of a diss to Mattel. Still one of the world's biggest toy brands, Mattel's entire market capitalization is only $3.1 billion -- so Hasbro apparently thinks it's worth 22% less than Entertainment One.

Second, Entertainment One's buyout will leave Hasbro strapped for cash; Hasbro only has about $1.2 billion in cash in the bank, after all, against $1.9 billion in debt.

Now what

Result: After effecting the Entertainment One purchase, Hasbro simply won't have the money to buy Mattel -- even if it wanted to -- adding injury to the insult of Hasbro picking Peppa Pig over its own product portfolio.

Crunching the numbers, analysts at DA Davidson concluded today: "It's now clear there will not be a HAS/MAT deal." No wonder Mattel shareholders are bummed.