Report: Potential Buyout Seen For LeapFrog Enterprises Inc.

LeapFrog Enterprises Inc.'s (NYSE: LF) sudden popularity among mutual fund managers is based on a two-pronged thesis, according to a report Wednesday from Reuters.http://www.reuters.com/article/2014/11/26/us-leapfrog-funds-analysis-idUSKCN0JA1ND20141126Either LeapFrog shares gain from blockbuster holiday success for its latest video game, or the product fails, the shares tank and the company gets bought out.Shares of the Emeryville, Calif., based electronic learning toy company were nearly unchanged by the report, although in the year to date its shares are off more than 28 percent.Citing data from Morningstar, Reuters said 29 funds have added LeapFrog to their portfolios in the last quarter, up 45 percent from the second period. Included in the lineup are Royce Funds, Franklin Templeton and Oppenheimer Funds.The company recently missed second-quarter expectations, reporting a 43 percent decline in consolidated sales, blaming a delay in launch of its much-heralded video game system, LeapTV, and lagging sales of its LeapPad tablets.http://www.leapfroginvestor.com/phoenix.zhtml?c=131670&p=irol-newsArticle&ID=1985027Reuters cited Piper Jaffray's Stephanie Wissink, who thinks LeapFrog could become an acquisition target."Investors who are buying now are hoping that this is the bottom," Wissink told Reuters. "The big guys are waiting for them to miss again so they can offer a buyout near cash value."Hasbro Inc. (NASDAQ: HAS) and Mattel Inc. (NASDAQ: MAT) were mentioned in the report as potential buyers.