Market Commentary: Is Disney Stock About to Get Nuked?
Disney is a well-known brand that has had a significant impact on popular culture for over a century. It all started with a mouse, but the company has since expanded to include the Star Wars, Marvel, and Pixar brands, as well as streaming services and theme parks.
Despite its success, Disney is no stranger to controversy. In recent years, the company has been involved in a number of high-profile disputes, including its opposition to Florida’s “Don’t Say Gay” bill and its recent partnership with a gender-fluid TikTok influencer.
These controversies have raised concerns among investors about the impact they could have on Disney’s stock price. After all, we saw what happened to Anheuser-Busch’s stock when the company partnered with a trans influencer earlier this year.
Key Points
- Disney has been involved in a number of controversies in recent years, including its opposition to Florida’s “Don’t Say Gay” bill and its partnership with a gender-fluid TikTok influencer.
- These controversies have raised concerns among investors about the impact they could have on Disney’s stock price.
- DIS is also facing challenges from increasing competition in the streaming market and the impact of the COVID-19 pandemic on its theme parks.
Disney & BUD: Shaky Ground?
To answer that question, it’s important to understand the factors that are driving the recent decline in Disney’s stock price.
One factor is the increasing competition in the streaming market. Disney+ has lost subscribers for two consecutive quarters, and the company is now raising its prices in an attempt to stem the tide.
Another is the impact of the COVID-19 pandemic on Disney’s theme parks. Attendance and hotel room bookings have decreased in recent months, and the company has yet to fully recover from the pandemic’s impact.
It can’t be dismissed, either, that Disney’s recent political controversies have alienated some consumers. The company’s opposition to the “Don’t Say Gay” bill has sparked a boycott among some conservative groups, and the partnership with the gender-fluid TikTok influencer has angered others.
All of these factors are weighing on Disney’s stock price but perhaps the largest cloud looming is whether it will experience a Bud Light moment.
Will Disney Stock Get Torpedoed?
Beyond the obvious dangers, one is the rising inflation, which could hurt the company’s bottom line. Another is the war in Ukraine, which is having a negative impact on the global economy and could also hurt Disney’s business.
DIS shareholders face a number of challenges, but it also has a strong brand and a loyal customer base. Still, the “Don’t Say Gay” bill is a particularly controversial issue, and it’s likely to alienate some Disney fans. The company’s opposition to the bill could lead to a boycott, which could hurt its bottom line.
The partnership with the gender-fluid TikTok influencer is also likely to anger some consumers. This could also lead to a boycott, or it could simply make some people less likely to do business with Disney.
While on a valuation basis, Disney is a compelling buy at this time, the outsized risk from its current strategy means shareholders are precariously perched, and those on the fence might want to wait-and-see a little longer how things shake out.
