Fortune

THE HIDDEN UPSIDE TO CEO DRAMA

When a company axes its chief executive, its stock often plummets. But when the firing is part of a bigger overhaul, investors can win in the long run. Here are some shake-ups worth celebrating.

IN RECENT YEARS, few corner offices have had doors that revolved as fast as Mattel’s. The toymaker has replaced its CEO three times since 2015—most recently last April, when former Google executive Margo Georgiadis stepped down from the post, to be replaced by Ynon Kreiz.

The turmoil isn’t surprising: After all, Kreiz’s predecessors weren’t able to stanch the decline in Mattel’s revenues, which dropped 23% from 2014 to 2017. With brick-and-mortar retail partners like Toys “R” Us struggling or collapsing under the Amazon onslaught, Mattel has fewer sales outlets, even as the ranks of its competitors grow. And Mattel’s stock price, to borrow a phrase from one of its vintage games, has gone Ker Plunk.

But investors can find reason for hope in Mattel’s most recent leadership change. There’s growing evidence

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