Disney Stock Got Killed On Black Friday, But Why?

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  • Shares of Walt Disney Co (NYSE: DIS) tumbled 3 percent on one of the biggest shopping days of the year, Black Friday.
  • ESPN reported a massive subscriber loss, which seemed to be the main driver behind the decline.
  • Other media stocks like Time Warner Inc (NYSE: TWX), Twenty-First Century Fox Inc FOX and Viacom, Inc. VIA (NASDAQ: VIAB) were also tumbling on Friday’s shortened session. Shares of Netflix, Inc. (NASDAQ: NFLX) were up 1.03 percent on the news.

Shares of Walt Disney Co were down 3 percent on Friday trading. The decline was mainly driven by news about ESPN having lost 3 million subscribers over fiscal 2015 – the year ended on October 3. The network now counts 92 million subscribers, down from 95 million last year, an SEC filing reported.

That's a loss of 7 million over two years.

CEO Bob Iger attributed the decline to a shift in consumer preferences, who are increasingly turning towards digital platforms. However, the migration is happening at a faster pace than originally expected.

“Still, live sports remain one of the few types of programming that still draw massive audiences at one time, making them valuable to advertisers. And for many customers, sports is the reason they keep their pay TV subscriptions,” a Reuters article further explained.

In a recent post, famed investor Jim Cramer noted, “When you lost 'some' subscribers it can be overlooked. But when your subscribers go to 92 million from 99 million in two years, as have ESPN's for Disney, then you've got a front and center problem."

"That's a nasty trajectory," Cramer added.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.

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Posted In: Short IdeasMoversTechTrading IdeasBlack FridayESPN
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