Geoffrey Smith 

Mattel stock (NASDAQ:) surges in premarket trades on Wednesday, after The Wall Street Journal reports that Mattel management held negotiations to sell it to private equity funds.

According to the WSJ, Apollo Global Management (NYSE 🙂 and L Catterton had held discussions with the company in recent months. However, the talks are still at an early stage. 

Although this deal is the latest in a series of notable buyouts it will still be eclipsed by Elon Musk’s bid for Twitter ($43 billion) 

Mattel stock rose 9.1% by 5:35 AM ET (935 GMT) at what was a seven week high.

Mattel said after its fourth-quarter earnings that it had completed a difficult turnaround after years of struggling with the relentless growth of digital entertainment products. It also has mended its differences with Hollywood, as CEO Ynon Kraiz pointed out in the release of a Barbie movie starring Margot Robertbie.

The company saw a 19% increase in revenue last year, and it made a profit during the second half. The company is forecast to confirm this trend later Wednesday with its first quarter. Analysts anticipate a 5% increase in revenue at $974 million, and an adjusted earnings of 3.8c per share. 

Even with its improvements in operating performance, it trades at a significant discount to the rest. On Tuesday, its closing price of $7.8 billion was reflective of a multiplier of only 8.5 times 2021 earnings.