Disney stock prices have had a dismal week following political controversy and reports of dropping stock prices for Netflix, one of Disney’s competitors in the streaming entertainment market.
According to Market Watch, Disney’s stock price was less than $120 as of Friday afternoon, down from a high around $200 in March 2021. CNN Business reported this week that Disney’s shares had dropped nearly 15% since the start of 2022.
“That makes Disney one of the worst performers in the Dow, which is down just 4% this year,” said the outlet. Even though shares were up in early 2021, Walt Disney stock was the worst performer in the Dow Jones Industrial Average last year, according to Barron’s. This year could be a repeat.
“Disney is poised to rank among the worst-performing stocks in 2022,” said Fox News Friday.
This year, the company – which also owns Marvel Entertainment and “Star Wars” production company Lucasfilm – faced a new political challenge in the form of a Florida education bill.
Last month, Florida Gov. Ron DeSantis signed the Parental Rights in Education or “Don’t Sat Gay” bill that prohibits classroom discussion about sexual orientation or gender identity in certain grade levels, into law. Following criticism from groups such as the Human Rights Campaign, Disney CEO Bob Chapek said he would stand by his LGBTQ+ employees.
In response, DeSantis’ criticized Disney for being “woke” and not standing up for parents though the company makes a “fortune” off its family-friendly image. Walt Disney World Resort, a popular family destination, is located in Orlando, Fla.
Florida lawmakers this week agreed to dissolve Disney’s Reedy Creek Improvement District in Orange and Osceola Counties. This district was established in 1967 and gives Disney “full regulatory control over Disney World as well as government services such as fire protection, emergency services, water, utilities, sewage and infrastructure,” according to CNBC.
Tax experts cited by the outlet believe the bill could create a problem for taxpayers in the form of bonds totaling more than $1 billion, the outlet said. The bill is set to go into effect July 1, and the district is expected to be dissolved June 1 of next year.
In addition to the political controversy in Florida, there has also been a recent streaming service stock slump. Streaming service Netflix’s stock has already dropped more than 40% this year and the company lost 200,000 subscribers in the first quarter – its first quarterly subscriber loss in more than a decade.
Disney launched Disney+, its own streaming service, in late 2019. Next month, the much-anticipated Star Wars franchise limited series “Obi-Wan Kenobi” will debut on the service.
As Disney and Netflix stock prices lag, all 11 major S&P 500 sectors fell Friday. The previous day, Federal Reserve Chairman Jerome Powell said the country’s central bank is determined to bring down inflation that has been rising since the dawn of the COVID-19 pandemic.
There is some hope, however. Even though the stock outlook for some companies is bleak, out of 99 companies in the S&P 500 that have reported earnings for the first quarter, 77.8% beat market expectations.
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