Disney Stock Takes a Dive as Streaming Woes Deepen
Disney stock was down around 8% on Thursday, Nov. 13, as investors reacted to the company’s lackluster fiscal fourth quarter and concerns about its long-term turnaround strategy. The news further extends a year-long slump that has plagued CEO Bob Iger throughout his second tenure at the company.
Disney has reported nearly flat revenue of $22.46 billion for the quarter ending in late September, well below Wall Street expectations, while company-wide segment operating income slipped 5% to $3.46 billion.
Disney shares have hovered between $80 and $125 since early 2022, after reaching almost $200 in early 2021. Since his return in 2022, investors have become increasingly skeptical of Iger’s turnaround plan, particularly as the company continues to face numerous challenges across streaming and cable networks. In an effort to restore shareholder confidence, Disney announced that it would double its share repurchases to $7 billion this year and increase its dividends by 50% to $1.50 per share.
Through the smoke, Disney’s direct-to-consumer business has been one of the company’s few bright spots. Disney+ and Hulu subscriptions have surged by 12.4 million to a combined total of 195.7 million subscribers. The success has been heavily aided by a new bundling deal that allows cable customers to purchase subsidised bundles including both Hulu and Disney+. Disney’s streaming sector posted a satisfying $352 million in operating income, up 39% from last year. Iger has also hinted at a more ambitious long-term use of the streaming platform, describing Disney+ as a potential for AI-driven shopping centers, gaming, interactive experiences and user-generated content. “The opportunity here is enormous in terms of increasing our engagement with Disney fans,” Iger told analysts.
One of the most pressing threats to Disney at the moment is its ongoing dispute with YouTube TV, which has blacked out ABC, ESPN and other Disney channels for over two weeks. This blackout has cut off Monday Night Football for 10 million subscribers, a massive blow for both fans and advertisers. Analysts have estimated this standoff with YouTube TV to cost Disney a staggering $30 million per week. Disney CFO Hugh Johnston did not sound optimistic about the blackout ending anytime soon during an interview with CNBC. “We’re ready to go as long as they want to,” said Johnston. The dispute adds fuel to the fire that has been Disney’s declining TV business, which has seen operating profits drop 21% this quarter.
Adding to the turbulence, analytics firm Antenna reported that the brief September suspension of “Jimmy Kimmel Live,” following his comments linking MAGA to the assassination of conservative activist Charlie Kirk, triggered an alarming doubling of cancellations for Disney+ and Hulu. Disney has yet to publicly address this report.
Meanwhile, Disney faces yet another challenge: finding a successor to longtime Disney CEO Bob Iger, whose contract runs through December 2026. Disney has announced plans to reveal its new CEO early next year, with Disney Experiences Chairman Josh D’Amaro and Disney Entertainment Co-Chair Dana Walden seen as the leading internal candidates.
Disney’s latest stock dive reflects a company that is caught between current challenges and future ambitions. Theme parks remain strong, and streaming is growing, but not fast enough to offset disputes like YouTube TV. Investors grow impatient with a turnaround narrative that has yet to make significant progress. As Disney approaches its new CEO transition, one question looms large: Can the company prove to investors that a genuine turnaround is underway and its best days are yet to come? For the time being, Disney’s next chapter hinges on whether it can translate its recent success stories into a strong enough story to lift a stock still searching for its magic.
Photo Caption: Cinderella’s Castle at Disney World in Bay Lake, FL
Photo Credit: Wikimedia Commons
