Disney Stock Sinks After Canceling Roseanne and Botching 'Star Wars' Movie
Tuesday was a bad day for Disney’s bottom line.
The company’s stock fell by more than 2 percent Tuesday, closing at $99.72 — the first time the stock had been below $100 in more than two weeks.
Based on Tuesday’s closing price, Disney shares are down nearly 8 percent so far this year.
Disney-owned ABC made news Tuesday when it wasted no time in canceling “Roseanne,” one of the network’s biggest hits of the past season, after star Roseanne Barr sent out a racially charged tweet aimed at Valerie Jarrett, who served as chief adviser to former President Barack Obama.
The reboot of “Roseanne” debuted in March to tremendous ratings, attracting more than 18 million for its premiere. The network had already ordered a full second season of the show.
Disney CEO Bob Iger said the network had no choice but to cancel the program.
“There was only one thing to do here, and that was the right thing,” Iger said Tuesday via Twitter.
From Channing Dungey, President of ABC Entertainment: "Roseanne's Twitter statement is abhorrent, repugnant and inconsistent with our values, and we have decided to cancel her show."
There was only one thing to do here, and that was the right thing.— Robert Iger (@RobertIger) May 29, 2018
Even though ABC represented a relatively small portion (8 percent) of Disney’s overall revenues last year, market analysts agree that Disney had no choice from a business perspective to cut ties with Barr.
“Disney’s corporate reputation means more than any single show on ABC,” wrote Michael Cannivet at Forbes.com. “By making the bold move of terminating the show as swiftly as it did, Disney put itself on the right side of a burgeoning trend investors are wise to monitor. That is: corporate responsibility.”
But Barr’s social media gaffe wasn’t the only thing dragging down Disney stock.
The much-anticipated release of the latest “Star Wars” film, “Solo: A Star Wars Story,” tallied just $103 million in box office receipts for the extended Memorial Day weekend — including just $84 million in North American ticket sales, the lowest opening for any of the four Disney-produced “Star Wars” films.
Disney had expected the film to open with $130 million.
The results have some investors questioning if the “Star Wars” franchise has lost some of its long-term potential for Disney’s revenue.
The disappointing showing for “Solo” breaks a string of Disney hits at the box office, including Marvel’s “Black Panther” and “Avengers: Infinity War.”
Disney’s stock opened Wednesday back above $100 before slipping almost all the way back to Tuesday’s close.
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