Disney Stock Rises As Investors Overlook Tech Glitches Hitting Disney+ Debut – Update

Dade Hayes

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UPDATED with closing prices. Disney stock bucked an otherwise break-even Tuesday trading day as the tech issues that marred the Disney+ streaming debut seemed only to stoke investor interest.

Shares in Disney led the Dow Jones Industrial Average higher, rising 1.5% to close at $138.74 on twice its normal trading volume. Gains across the major stock market indices were slim and most media and tech issues moved only fractionally, making the Disney gains more noteworthy.

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In 2019 to date, shares in Disney have risen more than 20% amid widespread optimism about Disney+, the company’s high-stakes entry into direct-to-consumer streaming. After experiencing tech issues Tuesday morning, especially among U.S. users in the Northeast, the gremlins gradually subsided over the course of the day. The company blamed unexpectedly high demand for Disney+.

Netflix stock declined a bit less than 1%, to $292.01. It is in negative territory for the year to date, and has fallen substantially from the $350 range it was in when Disney laid out its streaming plans during an April investor day. That presentation resulted in a one-day 10% gain in Disney shares as Wall Street signaled its belief in other companies’ ability to challenge Netflix’s streaming supremacy.

Analysts have been almost universally upbeat about Disney’s prospects as it launches Disney+. Jessica Reif Ehrlich of Bank of America Merrill Lynch, reiterated her “buy” rating in a note to clients Tuesday. She has a 12-month price target of $168 and upped her subscriber forecast to more than 90 million by 2024, from 60 million previously. Ehrlich wrote that she is “incrementally more bullish on monetization prospects beyond the legacy pay-TV model” given the arrival of Disney+.

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