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Wednesday, Mar 27, 2024

Disney Withstands ‘Solo,’ ‘Roseanne’

The stock of Walt Disney Inc. has remained stable despite a relatively turbulent couple of weeks, but its price reflects pressure that started well before Roseanne Barr’s now-infamous tweet. Disney stock fell 1 percent in the two weeks following May 23, closing at $101.91 on June 6. The company had a few big news breaks during the period: The release of “Solo: A Star Wars Story” on May 25, an announcement of the date 21st Century Fox Inc. shareholders will vote on Disney’s buyout of the media company’s television and movie production assets and the cancellation of “Roseanne” – the highest-rated show on ABC Television Network, which is owned by Disney – following a racially charged tweet by the show’s star. “Solo” generated $84.4 million in domestic ticket sales revenue during its opening three-day weekend, according to Disney. It had been projected to bring in $130 million. The studio’s other Star Wars movies fared significantly better, with “The Last Jedi” making more than $220 million the weekend of its release in December and “Rogue One: A Star Wars Story” hitting $155 million when it came out the year prior. The first film in Disney’s new trilogy, “The Force Awakens,” topped them all at $248 million when it opened in December 2015. But while the numbers for “Solo” are less than ideal, the studio still is in a good position with the franchise overall, Tuna Amobi, senior equity analyst at CFRA Research in New York, told the Business Journal. And although the loss of “Roseanne” will constitute a financial hit, it’s not likely to impact the company on a broader scale, he explained. Amobi does not share some investors’ anxiety that interest in Star Wars is waning. “(We) can’t explain why the film fell short, but the broader pipeline has never been more robust in terms of the franchises and spinoffs on deck,” Amobi said. “We have no concern.” Even without its acquisition of Fox’s production assets – on which Fox and Disney shareholders will vote on July 10 – Disney remains well above the competition in terms of market share, Amobi explained. The studio has a dozen movies coming in the next 18 months. Disney stock is outperforming those of competitors CBS Corp. and Comcast Corp., which are down 15 and 23 percent respectively since the start of the year compared to Disney’s dip of 8 percent. Still, trading in Disney shares could become volatile ahead of the Fox acquisition vote and a likely bidding war with Comcast, which is reportedly lining up an all-cash deal for the assets, Amobi said. A ruling on the federal antitrust investigation into a merger between Time Warner Inc. and AT&T, which is expected June 12, could prompt Comcast to make an offer to Fox, he explained. “The specifics on that will be closely monitored to see what premium (Comcast) has over Disney,” Amobi said.

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