In the year since its debut as a Disney stock in 1999, the company has been on a rollercoaster ride, with a steady decline and a surge in the year before its first public stock offering.
In the early 2000s, the stock was priced at $1.
But the price plummeted to $1 and then collapsed to below $0.50 in 2005 and has remained there.
As the stock price has risen in recent years, the share price has plummeted and the stock is now worth less than a quarter of what it was in 2009.
At the start of 2016, Disney was valued at $18.3bn, with its market capitalisation hovering around $28bn.
But analysts now think that Disney’s valuation will be around $15bn by the end of 2021, meaning that the company will have to slash its costs in order to make up for its losses.
Disney’s stock has fallen more than 50 per cent over the last decade.
Since 1999, it has fallen by more than half, from $23.70 to $10.65, according to FactSet data.
As Disney has become less profitable, it was forced to cut staff numbers, with more than 2,000 employees cut in the past year alone.
The company announced on Wednesday that it would slash the number of employees it had on hand by half in 2019, and that the total number of workers it had would be cut by a further 40 per cent by the year 2021.
“We have a business that is very challenging,” said CEO Bob Iger, in a statement.
“The challenges of this new era will be far more challenging than what we experienced in the late 1990s and early 2000, when Disney was a global leader.”
I have great confidence in our team and the vision we have for Disney, and we will make difficult choices in the coming months to protect our core brands and shareholders.
“But the market was pricing Disney at $20 to $25 for decades before the dotcom bubble. “
For the past decade, Disney has been an overvalued company,” said James Kocher, an analyst with Wedbush Securities.
“But the market was pricing Disney at $20 to $25 for decades before the dotcom bubble.
Disney declined to comment on its cost figures. “
If you were a large company in 2020, and you were looking at Disney’s market cap, it would have been valued at about $90 billion,” he said.
Disney declined to comment on its cost figures.
Its stock price currently trades at $14.95.
Disney shares have lost nearly $500m in value since 2009, when they were valued at a record $1,000 in 2009 but have fallen to $3,200 by the time of the announcement.
“I think we have to look at Disney to make sure that it is not overvalued, or it’s going to lose its value,” Mr Kocber said.
The Disney logo is seen on the facade of Disney Studios, in Los Angeles, California, U.S., November 18, 2021. “
Disney has been a great company for the last 20 years, and they have been one of the leaders in animation.”
The Disney logo is seen on the facade of Disney Studios, in Los Angeles, California, U.S., November 18, 2021.
REUTERS/Mario Anzuoni
