Shares of the Walt Disney Company tumbled to their lowest level in nearly nine years, after a series of failed films and political controversy.
Commentators attribute the recent losses to the entertainment company’s adoption and then a doubling down on its support of a “woke” agenda.
Many of the problems stem from alienating parents after Disney has been accused of allegedly attempting to groom children into embracing leftist ideology.
The entertainment giant notably got into a public battle with Florida Governor Ron DeSantis over his state’s attempt to stop sexually inappropriate materials from being taught to young children in schools.
The company also faced another PR disaster when footage of an internal meeting was leaked, showing Disney executives openly discussing on how to hide left-wing propaganda in their films.
More backlash came when Seann Altman, a biological male who says he is “gender fluid,” was hired by Disney to market girls’ clothing on social media.
Disney Stock Plunges to a New Low
Disney’s stock value at one point fell 3.9 percent on Aug. 24, to $82.47, its lowest since October 16, 2014, when it ended the session at $81.74, according to Dow Jones Market Data.Shares have dramatically plunged 59 percent from their all-time closing high of $201.91 in March 8, 2021.
Disney options were busier than usual, with some 321,000 contracts traded, or 1.4 times the average daily volume, according to data from options analytics firm Trade Alert.
Bearish investors were actively betting on put options that would guard against the stock slipping below $80 by mid-September and mid-October.
Disney’s value was further weakened by overall weakness in the markets, as investors become cautious ahead of Friday’s comments by Federal Reserve Chairman Jerome Powell on interest rates.
Several investors are predicting a further price drop over next few months, according to Reuters.
CEO Promises Changes to Revive Company Fortunes
At the latest earnings report meeting on Aug 9, Disney CEO Bob Iger told investors that the studio would attempt to turnaround its finances with a combination of price hikes across its streaming services, boosting ad volume, and staff cutbacks.Mr. Iger also acknowledged that Disney was facing a “challenging environment in the near term,” as the company’s shares tumbled over 5 percent in the last quarter.
The Disney CEO said that the studio needed to improve the quality of Disney’s films and focus more on streaming its flagship sports brand, ESPN, directly to consumers.He also saw a need to resolve the writers’ and actors’ strikes in Hollywood, which has led to a halt in most film and television production.
Disney admitted in its latest report that it lost $512 million in the third quarter and was continuing to lose money across the board from its declining linear TV business, its faltering new streaming service, multiple failures at the box office, and falling parks attendance, after an initial post-pandemic surge.
“From our point of view, Disney has problems across just about every one of its businesses,” Brandon Nispel, KeyBanc Capital Markets analyst, told MarketWatch.
Disney’s TV subscribers have been declining at a 6–7 percent rate, which has taken a toll on advertising and affiliate revenue.
The company’s streaming service, Disney+, saw a massive surge in cancellations for the first time after raking in millions of viewers over the past few years.
Although 800,000 Disney+ subscribers were added, this was 100,000 subscribers short of analyst estimates.
Approximatey 12.5 million subscribers to the Disney Hotstar service in India were lost, or nearly a quarter of its subscribers, after it gave up rights to Indian Premiere League cricket matches.
Studio Faces Disaster as Families Stay Home
Meanwhile, one of the entertainment company’s most consistently profitable assets, the Walt Disney theme parks in the United States, saw a downturn in attendance this summer.However, Disney’s cruise line business and international theme parks were still financially doing well, especially in China.
It’s once legendary studio business has become a perpetual “loss leader,” as it appears to no longer be winning over audiences, according to Mr. Nispel.
The studio wasted millions producing and promoting films like the “The Little Mermaid” remake, “Elemental,” and “Indiana Jones,” each of which failed to live up to their high expectations.
Disney’s upcoming “Snow White” feature is facing ridicule from critics, and even its main star dislikes the story, reported Fox news.
Instead of returning to its tried and true formula and focus on producing the family-friendly entertainment that built the studio, executives appear to be dedicated following a path toward insolvency, as parents and their kids increasingly avoid their woke products.
Anson Frericks, a former Anheuser-Busch executive, told Fox News last week that Disney was making some of the same mistakes his former company did by accepting the woke and transgender agenda.
“They are making the same mistake as Bud Light, and I think they’ve been making the same mistake as Bud Light for over a year now,” he said.
“You go back one year, what does them getting involved in the parental rights bill in Florida have to do with them being the world’s premier family entertainment company?” asked Mr. Frericks.
“It has to do with nothing. If you take a look at it, they had an approval rating of 77 percent. People loved what Disney was doing. It cratered to 33 percent after that.”
