‘Avatar: The Way of Water’ couldn’t reverse Walt Disney Co.’s recent funk, which has the stock on a path for its worst year since 1974.
James Cameron said the film needed $2billion in sales to break even.
Disney shares DIS, -0.29% sank nearly 5% to their lowest level since March 2020 on Monday, after the blockbuster sequel and one of the priciest movies in Hollywood history fell short of the hype in its opening weekend.
Disney+ has also struggled, losing $1.5billion in 2022 alone.
‘Avatar: The Way of Water’ hauled in $134 million domestically and had the second-largest global opening of 2022, but fell short of tracking estimates based on advance U.S. ticket sales and disappointed in one of the biggest markets for the franchise, China.
Disney had hoped to clean up in China, where the first movie in 2009 did blockbuster business. ‘The Way of Water’ earned $57.1 million there, which Disney described in a Wall Street Journal report as disappointing but understandable.
‘The problem is nobody wants to go to the cinema, because they’ve been told that COVID is extremely dangerous,’ Tony Chambers, Disney’s global head of theatrical distribution, said in the article.
‘Although cinemas are open, the appetite for going to them isn’t really there.’
The news helped send Disney’s stock down 4.8% Monday, the biggest decline of the day for a Dow Jones Industrial Average DJIA, -1.05% component, to $85.78 — two cents shy of Disney’s lowest closing price since 2014.
The Way of Water’ tied with ‘The Batman’ as the fourth highest domestic debut of the year, finishing behind several Marvel blockbusters like ‘Doctor Strange in the Multiverse of Madness’ ($187.4million May), ‘Black Panther: Wakanda Forever,’ ($181million in November) and ‘Thor: Love and Thunder’ ($144.2million in July).
It has been a troubling year for Disney, with Disney+ losing money despite increasing subscribers. The streamer lost $1.5billion in 2022, up from $630million in 2021.
Perhaps the biggest hit the company has taken was over outgoing CEO Bob Chapek’s handling of Florida’s supposed ‘Don’t Say Gay’ bill.
It was reported that Chapek was fired after receiving several internal complaints from senior staffers that the exec was running the company into the ground.
The former CEO Bob Iger – who made a shock return to the top job last month – publicly and privately stated he disliked how Chapek handled everything, from the battle with Ron DeSantis, which led to the company losing major tax breaks, to self-governance, to Scarlett Johansson’s contract dispute over Black Widow.
‘Avatar’s” less-than-stellar start is just the latest setback for Disney shares, which have declined 44.6% this year, putting them on pace for their biggest annual percentage drop since 1974, according to FactSet.
The broader S&P 500 index SPX, -1.45% is down 19.9% in 2022, and the Dow is down 9.9%.Disney stock hit $200 a share at its pandemic-era peak in March 2021, after Chief Executive Bob Chapek revealed early streaming success for Disney+.
Chapek was replaced last month by predecessor Robert Iger after Disney missed revenue expectations by roughly $1 billion in the fiscal fourth quarter and provided a disappointing forecast.
