For three years, The Walt Disney Company struggled under the new leadership of Bob Chapek. During Chapek’s tenure, the theme parks were forced to close due to COVID, which hit the company hard. However, things did not get better for Chapek once the Parks reopened. Disney continued to struggle as fans became angry over skyrocketing prices and declining quality. Chapek’s poor leadership wasn’t only felt by fans, but also by the stock market, who saw Disney’s stock continue to decline despite the now-fired CEO’s best efforts.
In November 2022, Disney’s Board of Directors had enough and fired Chapek. That same night, they announced that beloved CEO Bob Iger would return to put the company back on top. Iger has changed a number of things at the Parks, including bringing back daily housekeeping and making parking at Walt Disney World hotels free for Guests staying there.
He also made changes on the film and television fronts. While Chapek was in charge, he had consolidated power to a few trusted advisors and had taken a majority of the creative control away from creatives. Iger went in the opposite direction, getting rid of those closest to Chapek and giving creative power back to those who were trusted to create it.
Unfortunately, things have not gone as well as Iger may have hoped. Guest satisfaction in the Parks is still not as high as it was, due mainly to astronomical prices, large crowds, and feeling like they have to purchase Genie+ if they want to get the most out of their days. Disney is also struggling on the film front, with recent releases Elemental and Indiana Jones and the Dial of Destiny tanking at the box office. The Little Mermaid has surpassed all expectations, but it is not enough to make up for the massive losses.
With all the issues surrounding the company, the investment company Keybanc Capital Markets has officially downgraded Disney’s stock. This was due not only to issues in the Parks, but also the many issues surrounding Disney’s streaming service, Disney+. Per a report from FOX Business:
“While Disney appears less expensive versus its historical average, we believe the stock is unlikely to work until a number of items have line of sight to being resolved,” analysts led by Brandon Nispel said on Wednesday, according to Barron’s.
KeyBanc analysts lowered Disney’s rating from overweight to sector weight Wednesday, causing its stock price to fall.
The main concern lies with not only Disney+, but also Hulu and ESPN. Bob Chapek, ex-CFO Christine McCarthy, and Chapek’s right-hand man, Kareem Daniel, are all being sued for lying about the profitability of Disney+ and fudging its subscriber numbers. Analysts also worry that the standalone ESPN app is priced too high for its actual value.
In 2021, Disney stock hit an all-time high of $200 per share. However, the stock now sits at just over $90 per share, rarely going over $100. Disney is also seeing some loss in revenue, and Iger is compensating for that by cutting Disney’s budget by $5.5 billion. Part of those budget cuts included laying off thousands of employees.
