Why Shares of Mattel Slumped Today

Shares of toymaker Mattel (NASDAQ: MAT) slumped on Monday as reports about a possible bankruptcy filing for toy retailer Toys "R" Us proliferated. With annual revenue of $11.5 billion spread across more than 1,600 stores, Toys "R" Us would be one of the largest retailer bankruptcies in recent memory. Mattel stock was down 6% at 2:45 p.m. EDT.

Toys "R" Us, which was taken private in 2005 in a $6.6 billion leveraged buyout, is struggling with a debt load of nearly $5 billion. The company's operating income was completely wiped out by interest payments in 2016, and with comparable sales in decline, the situation will only get worse without some sort of restructuring.

Image source: Toys "R" Us.

Source: Fool.com