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Trouble is looming for a publicly-traded pop culture manufacturing company owned in part by Disney’s CEO Bob Iger following allegations of illegal business practices by the company’s board of directors.
Related: Disney CEO Bob Iger in Talks to Purchase Disney & Pixar Toy Manufacturer
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Pop Culture Becomes a Tangible Item
Fans of Disney, Pixar, Star Wars, Marvel, music, sitcoms, cult TV shows, and characters from countless franchises and entities around the globe were given a new way to celebrate their fandom when the Funko company began selling its first collectible items in 1998. Thanks to Funko, Inc., fans could finally hold the world of pop culture in the palm of their hands.
Funko, Inc.’s wide array of vinyl collectibles, known as Funko Pop figures, feature big heads, button-like eyes, and the perfect mix of quirk and cuteness. These figures capture the essence of fans’ favorite characters from movies, TV shows, video games, and even real-life icons, all with a signature style that’s instantly recognizable.
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From superheroes to sitcom stars, musicians to monsters, Funko Pop! figures turn pop culture into a collectible craze. Whether you’re a fan of classic Disney characters, the latest Marvel superheroes, or cult TV shows like The Office, there’s a Funko Pop! for everyone. Each figure is a miniature tribute to the characters you love, and with their bright colors and exaggerated features, they bring a playful touch to any display.
What makes Funko Pop! so addictive? It’s not just about collecting; it’s about the joy of finding your favorite characters and seeing them in a whole new, adorably stylized way. With countless figures to choose from—and new releases all the time—Funko Pop! figures are like a never-ending treasure hunt for pop culture fans.
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Disney’s Bob Iger Becomes Owner of Funko, Inc.
In May 2022, just over four months after Bob Iger’s departure from The Walt Disney Company, Funko, Inc., announced the receipt of a $263 million “strategic investment in Funko in an all secondary transaction.”
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The Chernin Group and its investor consortium are acquiring from ACON Investments’ 12,520,559 shares of Funko Class A common stock, or 80% of ACON Investments’ stake in Funko, at $21.00 per share and will own 25% of the Company following completion of the transaction. Additional investors in the consortium include eBay Inc. (Nasdaq: EBAY), Robert A. Iger (Former Disney Chairman and CEO), and Rich Paul (CEO and Founder of Klutch Sports Group and Head of Sports at United Talent Agency).
Funko further announced the designation of two advisers to its Board, one of whom would be Disney’s Bob Iger.
Investing in Funko, Inc. was just one of Iger’s post-Disney ventures, but it might not have been as lucrative an opportunity as Iger once thought.
Funko, Inc. Sued By Shareholders In Class-Action Suit That Alleges Illegal Business Practices
In early 2022, shareholders filed suit against Funko, alleging that the company overinflated the value of its shares, following a sharp decline in the price of shares after the company went public in 2017.
Credit: Funko, Inc.
Shareholders allege that they were misled by company execs and that Funko ultimately made “false and misleading statements” about the company’s financial outlook and performance.
Per court documents, Funko execs allegedly took steps to make the company look like it was in better financial shape than it was, thus preventing stockholders from making decisions about buying and selling their shares based on truthful and accurate information:
In documents filed in different lawsuits in the states of California and Delaware, board members and Funko’s executives have been accused of withholding information about the company’s lower-than-expected sales, growth, operational difficulties, and inventory management, including a risk that Funko may need to write off slow-moving inventory, according to a Funko press release.
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Funko Plans a Massive Dumping of Its Collectibles, Citing a Sharp Decline in Demand For the Items
In March 2023, CBS News reported about Funko’s announcement of a “sharp plunge” in the value of its collectibles, saying that the company planned to get rid of more than $30 million worth of its vinyl figurines:
Demand for the toys has tumbled so much that parent company Funko said it plans to “eliminate” between $30 million and $36 million worth of the vinyl figurines. Funko said it will trash its overstock of collectibles during the first half of this year.Â
Who Wins In the Settlement, and How Much Will They Receive?
Though Funko has not admitted to any wrongdoing in the case, attorneys for the pop culture manufacturing company have proposed a settlement, and both parties have agreed to it.
Under the agreement, each shareholder will be awarded $2,500, amounting to a settlement amount of more than $2 million, pending a judge’s approval.
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But it’s the attorneys for the plaintiffs in the class-action suit that will ultimately be the biggest winners in the case, should the settlement be approved by the judge. When all is said and done, the company’s insurers will write a check to the attorneys for more than $2.1 million.
The judge is expected to make his decision at a hearing scheduled on November 15.
