Shares of the Walt Disney Co. plummeted late Tuesday and into early Wednesday to their lowest level in nearly a decade as concerns mount over the company’s profitability and wild spending habits on Disney+ and other streaming services.
Disney stock was down more than 13 percent on Wednesday following the company’s disappointing fourth quarter results that contained a slew of bad news, including the revelation that Disney lost a staggering $1.5 billion on streaming services such as Disney+ and Hulu for the period.
At just below $87, Disney shares are at their lowest level since 2014. For the calendar year, the stock is down close to 70 percent.
Disney Stock Plunges 11% To New Multi-Year Low On Earnings Miss, Weak Profit Outlook https://t.co/OYbQl1UrUQ
— Deadline Hollywood (@DEADLINE) November 9, 2022
Disney’s earnings and revenue for the quarter failed to meet Wall Street’s expectations, causing some analysts to cut their valuations. The company’s streaming losses have steadily mounted this year as it aims to challenge Netflix for market dominance.
Disney said its three main streaming services — Disney+, ESPN+, and Hulu — have increased their subscriber numbers to more than 235 million as of October 1 — exceeding Netflix’s 223 million subscribers. Both Disney+ and Netflix are in the midst of rolling out ad-supported options for consumers in the hopes that commercials will not only provide another source of revenue but also lure more customers at a time when many are looking to save money.
Like other legacy studios, Disney is betting the farm on streaming entertainment. While they have the advantage over Netflix in terms of their vast libraries of movies and TV shows, Netflix has had a head-start in terms of building a subscriber base.
Disney recently announced steep price hikes on Disney+ and Hulu, with the price of a Disney+ subscription jumping nearly 40 percent.
Disney shares have been a mostly downward trajectory this year, alarming longtime investors who once regarded Disney as a sure thing. As Breitbart News reported, the stock closed below $100 in June, the first that had happened in more than two years. Since then the stock had recovered some of its losses, only to decline once again starting in the fall.
Follow David Ng on Twitter @HeyItsDavidNg. Have a tip? Contact me at dng@breitbart.com
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