Walt Disney Co (NYSE: DIS) investors were subjected to unwelcome news – though, arguably, the news was hardly a surprise. The company’s latest movie, the Snow White live-action remake, was a box office flop.
During its opening weekend, the film made approximately just $87 million, which, while a massive figure in its own right, is dwarfed (no pun intended) by the $240-$270 million budget.
Already by press time on March 24, the fact that Snow White is set to be a major flop is having a bearing on DIS shares as they are losing much of their Friday session and after-hours positive momentum.
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Why Disney shares are likely to move lower
There are multiple potential reasons why Snow White failed to meet investors’ and producers’ expectations in its opening weekend. The first and arguably simplest reason is that interest in Disney remakes has been lackluster in recent years.
For example, the live-action Lion King – titled Mufasa: The Lion King – qas a major success, scoring $569.6 million against a $240.2 million budget. On the other hand, Mulan made $69.9 million against the $200 million expended on the movie.
Is Disney ‘going broke’ due to ‘going woke?’
Another big reason for Snow White’s lackluster performance is the now-standard ‘woke’ backlash. Many watchers – and gamers – have for years been unhappy about Holiwood’s attempts to introduce the decades-old theater practice of ‘color-blind casting’ into films.
In the case of Disney’s latest flop, the issue was particularly pointed as many were unhappy about Rachel Zegler playing a character called Snow White. Furthermore, the backlash was amplified by what some pundits have described as the actress’ ‘woke tirades’ mostly targeting President Donald Trump.
Still, the impact of the Zegler backlash is difficult to assess fully and may not have been decisive. So far, the slogan ‘go woke, go broke’ has been only selectively true, with most examples pointing out that it is more about who a company’s core customers are than any specific actions.
Bud Light (NYSE: BUD) did suffer financial hardship after its ‘woke’ ad campaign, but the electric vehicle (EV) maker Tesla (NASDAQ: TSLA) is having a tough time due to Elon Musk’s move in the opposite direction.
Simultaneously, Disney movies – and particularly its animated classics and remakes – are supposedly intended for everyone and their dog, and the impact cannot be dismissed.
Despite the talk about the ‘woke tirades’ and the grumbling over ‘color-blind casting,’ Snow White is more likely to have suffered from a mix of factors as Disney is, arguably, being targeted by two separate and powerful boycotts.
The other Snow White boycott
While many found Gal Gadot’s casting as the Evil Queen appropriate, her role in the film drew strong calls for a boycott. Along with being Israeli, Gadot is a known and vocal supporter of the IDF’s operation in Gaza and the occupied West Bank.
Considering the fact Snow White hit the theaters as Israel resumed its operations in Gaza, swiftly killing a staggering number of children and other civilians after it committed hundreds of ceasefire violations in the preceding weeks, many potential viewers were inclined to penalize Disney for hiring the actress.
However, the impact of that particular boycott is difficult to gauge, much like the impact of the ‘woke’ backlash. On the one hand, Captain America: Brave New World is proving a global box office success despite calls for a boycott over featuring an Israeli superhero who shares the name with an infamous massacre.
Simultaneously, the success may not be that strange as the MCU appears to be single-handled invalidating most theories about supply and demand.
On the other hand, other Palestina-related boycotts, such as the Starbucks (NYSE: SBUX) one, are known to be having an impact, indicating, once again, that the effect has more to do with the core audience than any specific actions on a company’s side.
What is going on with Disney Stock
Lastly, though the box office shock is likely to impact Disney shares, there is a strong possibility it will be an ephemeral period of heightened volatility rather than a protracted downturn.
With its latest closing price of $99.46, Disney stock is 10.25% down year-to-date (YTD), but its performance in the most recent session has been positive, with a 0.61% climb. Though its Friday after-hours climb was diminished to 0.27% in the Monday pre-market, the equity is yet to move into the red in the short-term charts.
The lack of an immediate strong negative effect isn’t that unexpected. Disney has grown far too large for a single movie with a budget under $300 million to jeopardize it, and many have been arguing that the live-action remakes are not designed to make money directly but to ensure the House of Mouse retains its intellectual property control over popular stories and characters, if not over the original animated films.
Featured image via Shutterstock
