That was not impatience, that’s speculation. A lot of the dot com companies had literally no revenue nor value. Disney isn’t a dot com business, the fundamentals for profitability are all there. They have the subscriber base, Netflix has proven the current breakpoint on subscriber growth is about 20 dollars a month and therefore the peak of profitability is likely around 30. Disney can achieve break even with 9.99 a month or with the lower price plus advertising subsidy. Based on current subscriber numbers and content spend. The rest is pathway for how much they can ring out of the service.
Unfortunately they were caught in the trap that the market rapidly switched from loss related growth to value and profit. They needed to stop devaluing their product for growth a bit earlier. And yea 6.99 a month for the entire back catalogue, direct to stream triple A product was seriously devaluing their product. Some of that is on ‘tech’ coming in and devaluing content over the last decade. But it certainly worked in terms or rather rapid catch up to the market leader (Netflix).
Now from a speculation perspective I think the market was widely out of whack, they valued the company far beyond its revenue while the parks were closed with an uncertain travel rebound (the 2020/21 stock peak). Then they literally undervalued the company saying it was worth less today than it was 5 years ago. So much so the entire market cap was easily attributable to JUST parks, resorts and consumer products. Never mind linear, entertainment? And I guess the company had negative net worth for the highly successful DTC. I’m not surprised the stock is rebounding now that market sentiments are improving.
This is frankly all on Chapek’s sheer inability to convey their strategy. I frankly see Iger doing very little except riding out the subscription price wave.
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