Shares in The Walt Disney Company (NYSE: DIS) declined over 15.5% since CEO Bog Iger returned to the helm of the media and entertainment giant in late November. Disney stock closed at its lowest levels in nearly nine years last night.
Disney shares are poised to commence trading on Friday at levels that haven’t been seen in nearly a decade following a post-earnings slump that suggests that investors are becoming more restless with the turnaround plans of interim CEO Bog Iger for the media and entertainment conglomerate.
Bog Iger, aged 72, took on the role of interim CEO at Disney in November 2022. He introduced extensive changes for the group, including significant cost-cutting endeavors and a new three-part organizational structure focused on Parks, Entertainment, and ESPN.
In addition, Iger announced that Disney would reinstate its regular dividend by the end of this calendar year. This had been suspended during the peak of the pandemic in 2020. Furthermore, Disney extended his contract until 2026, earlier in the summer.
Nevertheless, the value of Disney (NYSE: DIS) shares has tumbled by more than 10%, with a notable 3.7% decrease recorded on Thursday following the release of the third quarter earnings report on August 9. The report revealed the upcoming price hikes for Disney streaming service Disney+, a decrease in subscribers, and an increase in operational losses for the service.
Disney also incurred charges amounting to roughly $2.65 billion over the quarter. Most of these charges were related to content removal from its streaming platforms and the termination of existing licensing agreements. In addition, the company disbursed $210 million in severance payments to laid-off employees.
“We acknowledge many execution risks, including DIS’s uniquely political risk. In our view, Iger has been adeptly maneuvering to address these risks, including cutting costs to improve growth, profitability, and free cash flow,” said Daiwa analyst Jonathan Kess in a recent client note. “Figuratively, Mickey is going on a diet and losing weight. We see Disney as a survivor and winner in the streaming wars.”
Disney stock showed a marginal increase of 0.50% to $82.88 in pre-market trading Friday. This uptick followed the close at nearly a nine-year low of $82.47 per share on the NYSE Thursday.
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