Uh-oh.
It looks like uber-woke Walt Disney has just lost bunches of money.
According to the New York Post, the movie and streaming giant's shares are at the lowest they've been since March 2020, at the start of Covid.
Shares in Walt Disney tumbled 11% to the lowest since March 2020 on Wednesday, as ballooning costs at the entertainment giant's fast-growing streaming division cast a shadow on strong subscriber additions.
Disney+ has attracted millions of subscribers and will launch an ad-supported tier next month, but executives' promise of profitability next year and forecast for operating results in the next quarter failed to impress.
The company, led by CEO Bob Chapek, missed analysts' expectations for fiscal fourth-quarter earnings after a $1.5 billion loss in its streaming division.
Disney is going all in on streaming and, for now, it's a money-losing proposition.
The projections from Disney are very bullish, but reality is setting in as they aren't getting enough subscribers to pay for all their content.
And now, stocks are being hit.
Shares were trading around $87 at midday Wednesday. They have fallen more than 35% this year, compared with a 20% drop in the S&P 500, battered by a cautious outlook for ad sales and recessionary fears.
Finance chief Christine McCarthy, in a call with analysts on Tuesday, said the ad tier was not expected to provide a meaningful impact to results until later in Disney's financial year.
Subscriber growth in Disney+ was expected to accelerate in the second quarter, she added, a sign analysts said indicated a soft first quarter...
A weaker-than-expected full-year revenue growth forecast also dragged shares. Disney estimated a "high single-digit" percentage growth in revenue in this fiscal compared to the last, while the Street was expecting 12% growth.
At least 13 brokerages cut their price targets on Disney stock.
Disney is going to have to make some changes, like maybe not ticking off half their customer base by promoting woke politics, in order to make up for these losses.
