Funko, maker of the cute action figurines adorning work desks worldwide, saw its stock plunge 18% on Tuesday. The market appears to be reacting to favorable beta reviews of Activision Blizzard's (ATVI - Get Report) Call of Duty: Black Ops 4. Donning the popular battle royale mode that has made Fornite famous, Call of Duty could prove a threat to the popular gaming franchise.
Funko recently signed a deal to distribute Fortnite dolls this coming holiday season. So, it's logical that any perception by the market that Fortnite could lose momentum would hit Funko.
A Funko spokesperson declined to comment. Call of Duty: Black Ops 4 is set for release on Oct. 12.
Hasbro's new deal to sell a Fornite Monopoly game and Fornite Nerf blasters are unlikely helping sentiment on Funko, either.
To be sure, the market may be over-reacting here.
Funko CEO Brian Mariotti recently told TheStreet the company is gaining "major" shelf space at mass retailers such as Target (TGT - Get Report) and Walmart (WMT - Get Report) . Sales trends on Amazon (AMZN - Get Report) continue to be hot too, said Mariotti, helping to offset the loss of toy retailer Toys 'R' Us to bankruptcy.
Funko expects sales to reach $1 billion a year within the next five years. The toy maker has found success in large part powered by a vast portfolio of 11,000 licensed characters.