Major Investor Urges Funko to Consider Sale After Stock Plummets 75%

New York hedge fund Pleasant Lake Partners has acquired a 10% stake in collectibles company Funko and is pushing the struggling toymaker to explore selling the business. The investment firm disclosed ownership of 5.5 million shares and plans to work with company leadership to boost shareholder value after Funko's stock crashed nearly 75% last year.

A New York investment firm has taken a significant position in collectibles manufacturer Funko Inc. and is urging company leaders to consider putting the business up for sale, according to regulatory documents filed Thursday.

Pleasant Lake Partners revealed it now owns approximately 10% of the pop culture merchandise company, which produces vinyl figurines and bobblehead collectibles. The hedge fund indicated it plans to work directly with Funko’s leadership team and board members to find ways to increase value for shareholders.

The investment group is calling for company executives to immediately begin a comprehensive review of potential options, including possible acquisition by either strategic buyers or financial investors.

Funko’s stock price rose roughly 4% during pre-market trading following the announcement. The company’s market value stood at approximately $245 million when markets closed Thursday, after suffering a devastating 75% decline throughout the previous year.

Company representatives did not provide an immediate response when contacted for comment about the investor’s proposal.

The manufacturer has faced significant challenges as consumer demand for toys has weakened, resulting in falling revenues over the past two years. The company specializes in creating collectible items based on popular culture franchises and characters.

Investment firm Fund 1, which operates as a managing partner for Pleasant Lake, disclosed in the filing that it holds about 5.5 million Funko shares.

Pleasant Lake indicated in its regulatory submission that it stands ready to take part in any potential sale process. The firm highlighted its experience with previous buyout deals, noting successful transactions involving L’Occitane in 2024 and Tile Shop Holdings this past December.