Disney Stocks Hits High Amid Reports of Cutbacks
Disney Stock Hits High Amid Reports of Cutbacks
Shares of Walt Disney Co. hit a record $58.82 on Monday and continued to climb after markets closed.
The news comes as other media giants such as Time Warner and Viacom also saw their share prices swell. The strong stock performance comes as Disney Studios is bracing to layoff more than 100 people across its studio and consumer products divisions, according to multiple media reports.
A spokesman for the studio did not respond to requests for comment.
Disney's share price is up more than 15 percent year to date, according to investing site Motley Fool. It has been a sterling few months for Disney, which closed a more than $4 billion purchase of Lucasfilm, signed a much-vaunted distribution pact with Netflix and has seen "Oz: the Great and Powerful" rack up $453.9 million worldwide since hitting theaters in March.
News of possible cutbacks at the Mouse House have been circulating for weeks, but were given added legitimacy after a report in Reuters last Thursday said that the impending cutbacks were being initiated as part of an internal audit that was ordered last year by Disney CEO and Chairman Bob Iger to streamline various departments. The hope is that Disney will emerge better able to meet the demands of more digital forms of distribution.
It is also a recognition that Disney has become increasingly reliant on its Marvel, Pixar and now Lucasfilm arms to fill its production pipeline while winnowing down the number of films it makes each year. The studio will only release three films that it developed internally -- "Oz: The Great and Powerful," "The Lone Ranger" and "Saving Mr. Banks." Fewer films means less staff is needed, or so the thinking goes.
Earlier this year, Disney laid off 50 people from its video game division. Last week, it closed LucasArts games and laid off the majority of its 350-person staff.