Disney Stock Is Down $8-$9 Since Disney’s Annual Sharholder Meeting. Why?

The Walt Disney Company is facing yet another stock drop. In the last two weeks, Disney’s stock went from $122.82 to $113.87 at the time of this article, a drop of about $9. What is going on?

The stock initially increased in early April ahead of the Annual Shareholder Meeting when everyone was waiting to see if activist investors like Nelson Peltz would gain a seat on the Walt Disney board. When the media began reporting that the current board would likely remain, the stock prices began to fall. When voting was concluded, and the status quo remained, the stocks started dropping again. 

Before the shareholders meeting, Disney CEO Bob Iger made several announcements at the Q2 2024 earnings call in February. Announcements like a “Moana” television show being reworked into a second film, Taylor Swift’s Eras Tour streaming on Disney+, and a deal with Epic Games for a partnership with Fortnite. The stock did start to climb then as well, but it didn’t hit the highs seen ahead of the board voting meeting when there was a possibility for new people to be added. 

Why is the stock falling?

There are likely a few reasons for the decline. The stock market has been declining overall, likely due to tensions in the Middle East, which Disney cannot control.

The Proxy War

However, it also seems to be related to the current board staying in power. Some people likely sold off stock they were holding, hoping to make a profit if activist investors won. Or they were holding stock to try and gain support for those activist investors. That would likely be the cause of the drops.

Lackluster film announcements.

Cinemacon may be a factor, as the stock dropped further after Disney and Marvel made announcements. Except for “Deadpool & Wolverine,” possibly the new “Planet of the Apes” film, and “Inside Out 2,” the slate didn’t look that promising. Combined with the news that Marvel’s “Captain America Brave New World” is “rebuilding the Avengers” with a new team, the stock started to drop. 

2023 was a terrible year for Disney at the box office as more and more people seemingly are waiting for the films to be added to Disney+, where they can watch them as part of their subscription service. 

Declines in key areas.

Disney is also facing significant issues with declines in legacy TV, and its streaming segment keeps losing money, even with people waiting for new films to drop on the service. 

Marvel and Star Wars shows have been declining in viewership as well. 

Theme park announcements.

When it comes to the theme parks, there have been a slew of announcements for Disneyland Paris but not much in the way of domestic theme parks. However, it is important to note that Disneyland does have a large expansion planned with DisneylandForward, but it is still proceeding through the Anaheim local government for approval. 

Walt Disney World has seemingly been stalled by issues related to the lawsuits with the Central Florida Tourism Oversight District, but that seems to be somewhat resolved, and we may hear more soon. We do know that Walt Disney World is filing permits for work in Disney’s Animal Kingdom and the Magic Kingdom that could be tied to the retheming of the Dinoland U.S.A. area and the “beyond Big Thunder Mountain” expansion. 

The next year will be crucial for Disney. Suppose they do not deliver on profitability, better stock prices, exciting theme park news, and the box office. In that case, they will likely be faced with Nelson Peltz again and likely several more “activist investors” vying for board seats and some control of the situation.

Hopefully, the stock will improve quickly. Since I started this article, the stock price has increased to $14.46. Maybe that’s a good sign.

What do you think? Comment and let us know!