Disney shares drop to nine-year low
Disney’s stock is down to 2014 levels, falling nearly 4% on Thursday, with some investors of the view that a further drop is on the cards in the next few months. IGTV’s Angela Barnes looks at what’s behind the decline.
(Video Transcript)
Disney's share price plummets
Disney's stock is back at a level not seen since 2014, down nearly 4% on Thursday, with some investors thinking that a further drop could be on the cards in the next few months.
Let's just have a look at the Disney price chart here. And you can see, it's an all-session stock on the IT platform. But you can see since 10 August, that peak there, that was the day that it was actually announced that Disney was following the footsteps of Netflix and raising prices for Disney Plus and Hulu. And you can see what happened after that announcement.
Fundamentally speaking, the price plummeted, as you can see. It's fallen about 10% since then. So what happened on 10 August? Well, it announced that it was raising prices by $3 to $14 for ad-free Disney Plus service in the US, while increasing the cost of Hulu without ads by 20% to $18.
The company's turnaround plan has been under scrutiny since Bob Iger returned as the company's chief executive and promised those price hikes being seen across the streaming platforms and more ads and cost cuts to lift the business.
The company also posted recently disappointing earnings with its streaming service Disney Plus, as we've been talking about here, extending user losses in Q2. Its market cap also down $16 billion since Bob Iger's return also.
Well, Disney said it would be profitable by end of fiscal year 2024, but strikes, delaying programming like we've also seen with Warner Brothers, now changes in its costs... It's pushing people out, and there's uncertainty, certainly as we can see, it's reflected in the charts as to whether they can make that profit happen.
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