“Avatar: The Way of Water” couldn’t reverse the Walt Disney Co.’s latest funk, which has the stock on track for its worst year since 1974.
Disney shares DIS,
It sank nearly 5% to its lowest level since March 2020 on Monday, after the blockbuster sequel and one of the most expensive films in Hollywood history failed to rave in its opening weekend. Avatar: The Way of Water took in $134 million domestically and had the second-biggest worldwide opening of 2022, but failed to track ratings based on advanced US ticket sales and disappointed in one of the franchise’s biggest markets, China.
Disney was hoping to clean up in China, where the first film in 2009 was a huge hit. The Way of Water earned $57.1 million there, which Disney called the Wall Street Journal report Disappointing but understandable.
“The problem is that no one wants to go to the movies, because they’ve been told COVID is too dangerous,” Tony Chambers, Disney’s global head of theatrical distribution, said in the article. “Although the cinemas are open, the desire to go there is not really there.”
The news helped Disney stock drop 4.8% on Monday, the largest intraday drop for the DJIA, the Dow Jones Industrial Average.
component, to $85.78 — two years shy of Disney’s lowest closing price since 2014. The less-than-stellar start for “Avatar” is the latest setback for Disney shares, which have fallen 44.6% this year, putting them on track for their biggest annual price drop percentage. centennial since 1974, according to FactSet. The broader S&P 500 Index SPX,
It fell 19.9% in 2022, and the Dow Jones index fell 9.9%.
Disney stock hit $200 a share at pandemic-era peak in March 2021, after CEO Bob Chapek She revealed the early streaming success of Disney+. Chapek was replaced last month by predecessor Robert Iger after Disney It fell short of revenue projections of about $1 billion in its fiscal fourth quarter and gave disappointing forecasts.
Read more: Disney shock: Robert Iger returns as CEO, Bob Chapek ousted
Iger returns with some lower targets — Disney is now valued at $156 billion instead of over $350 billion at its peak, and analysts cut 20% from Disney’s earnings forecast for the new fiscal year. But “Avatar” ticket sales this month are expected to generate the biggest revenue quarter of the year for Disney’s movie business, which hadn’t expected sales of nearly $300 million in the last quarter.
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