After the huge drop most of the studios suffered after releasing their Q2 results - several are crawling their way back up in value.
WBD closed yesterday at $13.79 after falling below $11.20 at the end of last month.
PARA that fell under $14 at the end of May is back up to $16.57.
DIS dropped under $88 a share last month and closed yesterday at $93.85.
Meanwhile all of these studios have decent recent layoffs, some pretty major in fact. Paramount reduced staffing by 25% - 1/4th of its workforce and are in the process of selling Simon & Schuster by year end.
Wow. I do know a lot of the layoffs also have to do with them pairing down all the streaming as well.
Streaming has cost the studios a fortune - trying to catch up to the Netflix mod.
They've spent millions to produce content to attract subscribers.
for a long time Wall Street was evaluating a company’s worth by their subscriber numbers —
However, when you multiply the number of subscribers against the money they’ve been spending + the cost of supporting the infrastructure those valuations don’t add up.
Even Disney+ they have a huge subscriber base but take a look at the per episode cost of the very high end shows they’re producing.
When the studios are saying they aren’t making money - they’re not actually lying. They’ve just completely mismanaged their financials through poor decisions and spending over the last ten plus years.
One thing they are learning is that if you build it that doesn't mean people will come...
