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Thanks for the well thought-out post. I will stick my nose in where it doesn't belong and add a couple of additional thoughts:

- JAKK couldn't handle the whole Hary Potter toy license. They'd go broke trying to do so. IIRC, the big toy companies got screwed on the Episode I licenses because they had to pay so much for the licenses that they couldn't sell enough crappy toys to cover it. Its much better to see JAKK getting a taste of it that they can handle in a division that is already integrated and doing fine.

- The toy industry is out of favor right now, but that won't always be the case. If you are willing to be patient (a rarity nowadays, I know), toy stocks will eventually come back into fashion and you'll be holding the goods. When the sector does come back in the limelight, JAKK is far more attractive than ill-managed, over-leveraged behemoths like HAS and MAT.

- It appears that JAKK has learned the perils of too heavy a reliance on one license/product line. In the process of diversifying away from WWF, they are picking up lots of smaller businesses that are attractive and will eventually yield at least one wowie-zowie type performer. I'd rather see them have PenTech (once its cleaned up), Charlie's Angels, a smallish Harry Potter license and a snazzy electric scooter than a single big bet.

- When all is said and done, the toy industry is largely faddish and there are few evergreen brands. That being the case, management's ability to catch the wave and turn on a dime is crucial. Although I have my misgivings about the way JAKK's mgmt is compensated and about some corporate governance issues, Jack Friedman and his team have learned how to play the game in the industry. They are capable of snagging worthwhile licenses, they run a lean business model and they appear to learn from their mistakes. This can't be said for an awful lot of organizations I have looked at as an investor.

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