Don Surber
All errors should be reported to DonSurber@gmail.com
Wednesday, May 04, 2022
Woke Disney has been a loser stock for 5 years
 Go woke, get broke. I offer as proof Disney stock.
If you invested $1,000 in Disney on May 3, 2017, your investment would be worth $1,003 today.
If you instead invested that $1,000 in an S&P 500 stock index fund, your investment would be worth $1,733 today.
The opportunity cost -- the money you could have made -- for owning Disney stock was 73 cents on the dollar.
If you took that $1,000 and stuck it under your mattress for those 5 years, you would have been $3 short of what you could have made buying Disney stock.
The rest of the S&P 500 companies saw their stock prices rise by 73% as a group.
Disney's stock rose by 0.3%.
This is astoundingly bad management. How can your stock not rise in an economy that saw all stocks rise? How can your stock be flat when you have launched the most successful streaming service in the world? That's what Disney+ is.
The answer is wokeness. Disney is following liberals down every daggone rabbit hole they find.
Clay Travis tweeted, "Disney stock is effectively unchanged since January 1st of 2018. Woke politics has been a disaster for ESPN and Disney. I’m curious whether this will lead them to change their ways."
He caught on quick.
It slowly dawns on the rest of the media that hey, maybe Disney threatening to withhold campaign donations from Republicans in Florida was a bad idea.
The Wall Street Journal said in an April 21 editorial, "The Walt Disney Co. needs Florida more than Florida needs Walt Disney. That’s the latest chapter in this tale of a CEO who followed his woke staff like a lemming off the cliff of cultural politics. Disney employees demanded that Mickey Mouse oppose Florida’s mis-described 'don’t say gay' bill. Now state lawmakers are reacting by putting down a few glue traps."
The editorial rightly said that CEO Bob Chapek miscalculated. He let the tail wag the mouse.
The Journal said, "Perhaps he thought this would be a free way to mollify his staff, but Mr. Chapek misjudged the political moment. Republican voters who have watched companies side with the progressive agenda and silence employees who disagree are fed up. Mr. Chapek was right the first time: Disney’s political foray didn’t stop the Florida law. But it made a lot of people mad, including Disney customers and state lawmakers."
Oops.
The editorial ended on a broader note, "There’s a warning here to other companies, especially Big Tech and Wall Street, which are mainly based in liberal states but conduct business everywhere. If they try to impose their cultural values, they risk losing Republican allies on the policy issues that matter most to their bottom lines, such as regulation, trade, taxation, antitrust and labor law. Polls show rising GOP hostility to big business, and that is likely to be reflected when Republicans take power.
"If good tax policy can’t pass Congress because Republican voters are furious about cultural imperialism from the C-suite, that’s bad for the country. It’s also bad for business. The Disney lesson for CEOs is to stay out of these divisive cultural fights. The lesson for political partisans in the workplace is that their bosses run the office, but they don’t run the country."
What a newspaper says does not matter. 26 years of writing editorials taught me that.
But what Wall Street says does matter. And investors are saying no to Disney. |
