In recent weeks Disney (NYSE:DIS) stock has been sliding, and it has dropped to new lows since April 2019. Although there have been some recent headwinds with the market correcting, the House of Mouse has been going in the opposite direction.
Disney to take a $175 million charge following the closure of its parks
The surprise withdrawal of its CEO Bob Iger is a major concern for the company adding to the impact of the coronavirus outbreak. Unlike most companies that are concerned about the possible disruption of supply chains and future hits, the company is already feeling the impact. For over a month now, its theme parks in Hong Kong and Shanghai have remained shuttered, and the company has indicated that it will take charge of $175 million this quarter following the closures.
Despite this gloom picture, several things have been rights from the House of Mouse in the last 10 months. The recent Disney sell-off was a result of concerns that the company’s shares had declined to below where they were last year when the company launched Disney+. The video streaming platform has been a success and has since attracted over 28.6 million subscribers.
Launch of Disney+ pushed the stock
Disney’s stock saw a fresh start in April last year when the company unveiled the platform. The amazing content on the platform and its affordable pricing pushed Disney stock to an impressive performance last year even before the service could launch.
Unfortunately, the stock has gotten back to where it was on the day Disney unveiled Disney+ in April. Similarly, Disney has gone and reversed attendance trends at its Disney World and Disneyland parks in the US, which was a sticking point form most bears in the summer.
For now, things are not great for Disney, and the success of its streaming platform will depend on other media networks. The new CEO Bob Chapek will have to turnaround things for the company, and if the coronavirus persists, then the company could continue taking more blows.