In a cover-flagged article in the current issue of Barron's, Jacqueline Doherty reports on the substantial percentage of investors that are expecting Marvel's share price to decline, and why.  Over 10% of Marvel's shares have been sold short by investors that are aggressively betting the stock price will fall.  Among future concerns cited in the article are movie/merchandise streams tied to lower-tier characters, increasing competition from DC-based movies, the possibility that there is a limit to how many Marvel-based movies can be successful in a year, and questions about future toy royalties. 


The toy royalty question is particularly interesting.  The article explores several possible explanations for Marvel's seven-fold increase in toy royalties the first nine months of 2003 vs. 2002, including possible increases in sales of licensed toys, a possible increase in the royalty rate paid by Toy Biz Worldwide (the Hong Kong-based company that licenses Marvel characters for toys, see 'Marvel Gets Bank Financing'), or the booking of non-refundable advances for future years in the current periods. 


Marvel's toy sales are growing (see 'Toy Biz Is on a Roll'), and so is licensing (see 'Hulk Licensing Bigger than Spider-Man').  The company has also embarked on an aggressive international expansion (see 'Marvel Looks Overseas').  Marvel CEO Allen Lipson is quoted in the Barron's article as arguing that Marvel's licensing model can be more stable than typical for entertainment companies. 


For pop culture retailers, the question is whether Marvel will continue to drive comic and licensed product sales to the extent it has in the past couple of years, and there's no sign yet that it's slipping.