If you search for “Lego stock,” you’ll see a stock chart of a company labelled LEGO and listed by NASDAQ. As you might know, if you can easily find a stock chart of a traded company, that means it is a public one. Does that mean that The Lego Group, the company behind our beloved interlocking plastic bricks, has finally gone public after 89 years?
Well, prepare to be disappointed.
The company listed as LEGO by NASDAQ isn’t a toy company. Rather, it’s a blank cheque company by the name of Legato Merger Corp. The corporation aims to acquire one or more firms and assets through mergers, stock purchases, or other means. It’s an entirely different firm to the toy company we initially talked about, The Lego Group.
As of now, The Lego Group is still a private company. But, will the company publicly trade its stock anytime soon?
Brief History of The Lego Group
Ole Kirk Kristiansen: “Only the best is good enough.”
We can trace The Lego Group foundation back to August 10, 1932. The company, which didn’t have a name yet, didn’t deal with plastic Lego bricks from the get-go. It began with the production and sale of small wooden toys. This comes as no surprise as the company’s founder was a carpenter named Ole Kirk Kristiansen. Kristiansen used to run a small wood-working business that sold household furniture.
It wasn’t until after World War II had ended, specifically in 1947, that the company started to sell Lego bricks following the acquisition of a plastic injection moulding machine. After the success of its newfound niche, LEGO has since expanded to encompass factories worldwide.
The name “Lego” comes from the Danish words leg godt, meaning “play well.”
CEO Niels B. Christiansen, a Danish businessman, has lead LEGO since 2017. It was during his time that the company was able to bounce back from its poor performance.
Why The Lego Group Matters
Even though the company is almost a hundred years old, LEGO hasn’t shown signs of slowing down. Forbes ranked the company #92 in its Top 100 Most Valuable Brands in the World for 2020.
Overall, The Lego Group has managed to outperform the general toy sector since 2017, a trend that is expected to continue.
Apart from its popularity, we can attribute LEGO’s recent growth rate to the COVID-19 pandemic. With families quarantining and spending most of their time staying home, they needed something to do. And they found something! Playing LEGOS and building LEGO models are great ways to pass the time.
During the first half of 2020, The Lego Group’s consumer base raised by 14%, whereas its gross revenue increased by 7%. Moreover, the company’s operating profit grew by 11%.
The group has also announced that it will invest up to USD 400 million into sustainability efforts.
When Will The Lego Group Go Public?
Unfortunately, there’s no news of whether the company will go public or not.
Kirkbi A/S, the founder’s family’s holding & investment company, owns around 75% of LEGO’s stock. Meanwhile, the remaining 25% is in the hands of The Lego Foundation. The Lego Foundation is an organisation that focuses on empowering children to be creative, engaged, and lifelong learners.
Coincidentally (or not), the deputy chairman and chairman of the board are Kjeld Kirk Kristiansen and Thomas Kirk Kristiansen. Both of whom are the grandson and great-grandson of the company’s founder, Ole Kirk Kristiansen.
With its holding & investment company and humanitarian organisation, the Kristiansen family practically owns the whole company. Unless an extraordinary event happens in the future, it’s hard to imagine that the Kristiansen family would give up even a slight bit of control.
Lego Stock Price
There is currently no lego stock price because the company isn’t listed on the stock exchange.
Lego Stock Market
Lego isn’t listed on the stock market and doesn’t offer a direct way to invest in the company. There are ways to indirectly invest in Lego which we discuss below.
Obviously with Lego not being listed, there is no Lego stock chart or historical stock price.
Lego Stock IPO?
A Lego IPO isn’t on the horizon just yet, but that doesn’t mean the company isn’t interested in going public. Lego is owned by the Kirk Kristiansen family and has been traditionally run as a private business. However, in recent years they have begun to explore the possibility of taking their popular toy brand public with an Initial Public Offering (IPO). The potential benefits of a Lego IPO include increased liquidity, greater access to capital for expansion and product development, as well as a way for the Kristiansen family to diversify their investments.
In 2017, there were reports that the company had hired Goldman Sachs and Morgan Stanley to explore a potential IPO. However, it was ultimately decided that an offering wasn’t necessary at that time. Instead, Lego opted to focus their efforts on expanding the business through strategic partnerships and acquisitions.
A LEGO IPO would likely be well-received by investors. The company has seen consistent growth in recent years, with revenues rising from $2 billion in 2012 to more than $4 billion in 2017. The brand is especially popular in Asia, and the company has recently made investments in China to expand their presence there. With a strong brand recognition worldwide and an expanding market, a potential IPO for Lego could be very successful.
Whether or not Lego does decide to go public remains to be seen, but it is clear that the company is tentatively open to exploring the possibility.
According to Statista, the worldwide brand value of LEGO was estimated to be $7.54 billion in 2020. This number is up 40.5% from the 2015 figure of $5.4 billion. In 2020 alone, the company’s total revenue reached $2.1 billion, outperforming that of Mattel.
How to Invest in Lego Stock
Despite its juicy performance, much of the company’s stock isn’t available to the general public. You can invest your money in comparable firms to The Lego Group, instead. Consider some of LEGO’s direct competitors. It feels like betrayal, but investments wait for no one.
- Mattel Inc. (NASDAQ)
Being the second-largest toymaker globally, only losing to LEGO, Mattel is a decent investment alternative. Similar to LEGO, the toy-making company also enjoyed significant growth from the pandemic. Among the company’s most well-known, highly collectable products are Barbie, Hot Wheels, and Uno.
- Hasbro, Inc. (NASDAQ)
Hasbro, Inc. is a multinational conglomerate that mostly deals with toys, board games, and media assets. The company is home to some of the most popular toy brands, including Monopoly, Nerf, and Furby. It’s also responsible for producing toys in popular media franchises, e.g., Transformers, G.I. Joe, Power Rangers, and My Little Pony. Hasbro itself created most of these franchises.
- Bandai Namco Holdings Inc. (OTCMKTS)
Based on the report from Newzoo, Bandai Namco is the 10th largest gaming company in the world and 3rd largest in Japan, behind Sony and Nintendo. Founded in 2005, the Japanese corporation is a result of a merger between toymaker Bandai and video game developer Namco. The holding company concentrates on arcades, video games, toys (like the Rubik’s Cube), anime, and amusement parks. It is a solid niche investment option.
If we’re completely honest, we can’t expect that The Lego Group will open up its doors to any investor, no matter how much money they are willing to shell out. With that said, regardless of how small of a chance it is, there’s still a possibility that the private company will go public one day. The current CEO and the executive chairman are not part of the Kristiansen family anymore, which could be an indication that they’ll go public, albeit a tiny one.
In the meantime, if you are still interested in getting involved with a toy company through owning stock, there are a few other comparable options to choose from.