Marvel Case
MARVEL ENTERTAINMENT GROUP
Bankruptcy and restructuring
Introduction
Marvel entertainment group was started by Martin Goodman in 1939. It originally was a comic book business, known as Marvel Comics now. We have no way to forget the images of X-men, Spider-Man, and Thor. Marvel Entertainment Group has had a glorious history, and a dominant position in the comic market. However, this glorious empire regretfully elapsed in the end. The historical rise and fall influences not only comic fans’ life, but most importantly to its investors and the financial market. Here we discuss in detail about the reason Marvel file for bankruptcy, the evaluation of the restructuring plan, equity worth per share under restructuring plan, its influence on the debt rising ability to other firms in the group, and why the portfolio managers choose to sell their zero coupon bonds.
Part 1 Analyzing problems: why did Marvel file for Chapter 11? Were the problems caused by bad luck, bad strategy, or bad execution?
After taking a deep look into its performance of a six-year period, we reached the conclusion that the fall of this comic star is mainly caused by bad strategy it adopted, especially the one to acquire Skybox. Though the first two issuance of debt did bring along good operating results, Marvel’s core business began to falter shortly after the third issuance. The sales of three major business lines: Sports and Entertainment Cards, Children’s Activity Stickers, and Published comic books all decline significantly after 1993. The main reason for this decline can be explained by the fact that child entertainment is becoming more diversified, with alternatives appearing such as video games. Besides that, collectors’ declining willingness to invest in comic books drive the sales down dramatically. However, these reasons have little things to do with luck: because a successful and experienced entertainment company like Marvel should have the ability to notice this kind of demand
Bankruptcy and restructuring
Introduction
Marvel entertainment group was started by Martin Goodman in 1939. It originally was a comic book business, known as Marvel Comics now. We have no way to forget the images of X-men, Spider-Man, and Thor. Marvel Entertainment Group has had a glorious history, and a dominant position in the comic market. However, this glorious empire regretfully elapsed in the end. The historical rise and fall influences not only comic fans’ life, but most importantly to its investors and the financial market. Here we discuss in detail about the reason Marvel file for bankruptcy, the evaluation of the restructuring plan, equity worth per share under restructuring plan, its influence on the debt rising ability to other firms in the group, and why the portfolio managers choose to sell their zero coupon bonds.
Part 1 Analyzing problems: why did Marvel file for Chapter 11? Were the problems caused by bad luck, bad strategy, or bad execution?
After taking a deep look into its performance of a six-year period, we reached the conclusion that the fall of this comic star is mainly caused by bad strategy it adopted, especially the one to acquire Skybox. Though the first two issuance of debt did bring along good operating results, Marvel’s core business began to falter shortly after the third issuance. The sales of three major business lines: Sports and Entertainment Cards, Children’s Activity Stickers, and Published comic books all decline significantly after 1993. The main reason for this decline can be explained by the fact that child entertainment is becoming more diversified, with alternatives appearing such as video games. Besides that, collectors’ declining willingness to invest in comic books drive the sales down dramatically. However, these reasons have little things to do with luck: because a successful and experienced entertainment company like Marvel should have the ability to notice this kind of demand