The Walt Disney Company’s stock price continues to slide. The price for one share of Disney stock closed at $79.90 on September 27, 2023, which is the first time it has closed below $80 since April 2014.
Disney’s stock price briefly dipped below $80 over the past few trading days, but still managed to close above $80. Looking back, the stock price dropped below $80 in March 2020 (its 5-year low was March 16, 2020 at $79.07) when the company closed all of its parks and resorts, but it still closed above $85 on the day.
What’s behind Disney’s dropping stock price?
Disney’s financial turmoil, specifically with its streaming and box office performance, has been well documented. As Disney attempts to stabilize its entertainment divisions, the parks and resorts division has been propping everything up with strong profits. As a result, Disney plans to invest $60 billion into its parks and resorts over the next 10 years.
But, investors don’t seem convinced by Disney’s long-term plans. Disney fans may not be convinced either, as it has been repeatedly noted that the company continues to talk about potential plans in its domestic parks without actually announcing concrete expansions. There’s been a lot of talk with minimal action.
Disney also has notoriously slow construction timelines in modern times, which means any new theme park announcements won’t open for several years. Any significant additions to Disneyland or Walt Disney World are realistically 5 to 10 years away, which is a depressing reality for passionate Disney parks fans.
That inaction on the parks and resorts side could be a big problem when Disney’s biggest competitor, Universal, is flying through construction on a brand new theme park (Epic Universe) in Orlando that’s scheduled to open in 2025. Disney’s competition isn’t sitting idle and seemingly recognizes an opportunity to capture more market share.
On the entertainment side, Disney has more questions than wins to focus on. They’ll be forced to make a decision on the remaining stake in Hulu (another large cost), and they have to hope Wish, their new animated feature, strikes gold at the box office. There’s a lot of uncertainty with Disney’s studio offerings.
The leadership of The Walt Disney Company has also been a source of uncertainty. Disney CEO Bob Iger recently extended his current run as head of Disney, which adds fuel to the fire that Disney has no clear succession plan. Iger’s weaknesses, such as the fact many of his decisions placed Disney in their current predicament, are being exposed.
Does Disney’s current leadership have what it takes to right the ship?
Back to the stock itself, Disney has said numerous times that they plan to bring back a “modest dividend” in 2023. However, Disney has not said how much the dividend will be or when it will be reinstated. At this stage the returning dividend (assuming it actually returns in 2023) may not be enough to steady the leaking stock price.
Disney’s stock price will be an interesting story to follow in the weeks ahead. If it continues to fall, it wouldn’t be surprising to see Disney make some drastic changes.