media and entertainment giant The Walt Disney Company (NYSE: DIS) enters 2023 under a familiar new leadership with Bob Iger returning as CEO. Iger served as his former CEO and chairman of the board for 15 years until he stepped down in 2020. The newly appointed CEO, Bob Chapek, was unlucky as his COVID-19 pandemic struck just a month into his tenure.
The lockdown made things worse quickly as parks and cruises had to close. Even cinema distribution channels and production slates have been closed due to social distancing and lockdown mandates.
So the company focused on strengthening its digital entertainment and streaming content, known as the direct-to-consumer (DTC) segment, as subscribers grew dramatically, led by Disney+. Also, on December 8, 2022, we launched the ad-supported tier.
The Market Was Giving Disney Stock A 40% Premium As The Streaming War Intensified Netflix Inc. (NASDAQ: NFLX), Amazon.com Inc. Prime (NASDAQ: AMZN), Warner Bros. Discovery (NASDAQ: WBD), Comcast Co. (NASDAQ: CMCSA) Peacock When Paramount Global (NASDAQ: PARA)It surpassed its early projections of 100 million users and continued to grow DTC segments such as ESPN and Hulu.
The expansion of Phases 3 and 4 of the Marvel Cinematic Universe (MCU) and the expansion of the Star Wars franchise with new shows have contributed to its rapid growth.it didn’t hurt either Verizon Communications Inc. (NYSE: VZ) The user had a free trial to try out Disney+.
It reached its heyday when the stock peaked at $203.02 and fired on all cylinders when it reopened on March 11, 2021, after which the stock fell despite an increase in subscriptions. In its fiscal 2022 fourth quarter earnings report, the company said Disney+ subscriptions grew 39% year over year from 164.2 million, HULU increased 8% to 47.2 million, and ESPN+ increased 42% to 24.3 million. reported that it did. Combined, across his DTC segment, he has over 230 million users worldwide.
park to the rescue
The Parks and Experience segment has sustained the company’s profitability as demand exploded during the reopening. We made a gain of $1.5 billion to offset the loss from the DTC segment (-$1.5 billion). However, many complain that ticket prices are too high due to inflation and strong US dollar headwinds.
Disney’s stock price is back to pre-pandemic and pre-Disney+ levels, recapturing premiums from the streaming wars.
very public execution
and Apple Inc. (NASDAQ: AAPL) With Steve Jobs at the helm, Iger signed a temporary two-year deal to return to the CEO position and carry out a restructuring to bring the company and stock back to profitability. During his first tenure, DIS’s stock price quadrupled.
The reasons for the unexpected and unimaginable turnover of CEO Bob Chapek over the weekend are still unclear. What’s even more baffling is that he came less than six months after the board renewed his contract for another three years. Perhaps there was some major behind-the-scenes politics going on that justified Bob Chapek’s surprisingly quick and humiliating replacement.
Why Chapek was fired
The primary concern is the continued operating loss in the DTC segment, which has missed analyst forecasts in three of the last five quarters. DTC segment operating loss doubled year over year to $1.5 billion in the fourth quarter of fiscal 2022. Moreover, his political rhetoric and his PR nightmares have embraced a “woke” agenda and alienated board members, shareholders, and customers.
His public fight with FL. Gov. Rick DeSantis stripped of independent autonomy over parental rights laws in education by repealing the Reedy Creek Improvement Act of 1967. There have also been allegations of fraudulent account practices to cover up the streaming service’s actual losses, but nothing has been made public.
Iger was an early architect of Disney+, launching it before retiring in 2020. He was also responsible for the acquisitions of Pixar, Marvel, Fox and Lucasfilm during his tenure. He has made his Disney+ profitability a top priority as the measure of success has shifted from growth to Wall Street profitability.
He will adjust the cost structure to focus less on growth and more on operating margins to get on the path to profitability. Iger maintains a hiring freeze as he seeks to restructure his company. He’s a dealmaker at heart based on his acquisition history, and may foresee many more potential acquisitions and divestitures during his recent tenure. Its avatar: Water Path The film became the sixth film to exceed $1 billion at the worldwide box office in two weeks, four of which were produced by Disney.
Weekly Inverted Cup and Handle
After peaking at $202.02 in March 2021, DIS stock is falling toward pandemic lows. Rebounding from $90.23 on July 11, 2022, near the 0.382 Fibonacci level on return he bounced back to $125.48, forming a rip. Forms a handle for Bob Iger news. The stock fell again, breaking through $90.23 and he fell to $84.69.
The weekly 20-period exponential moving average (EMA) resistance fell at $112.17, followed by the 50-period moving average (EMA) at $98.38. The weekly Stochastic has lost momentum and is back in the 20 band. If stocks fail to bounce off the falling 20-period EMA, an inverted cup-and-handle collapse could break the pandemic lows. $60.52, $46.96.
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