A securities class action has been filed in the USDC – C.D.CA. against The Walt Disney Company (DIS) (“Disney” or “the Company”) on behalf of all persons or entities who purchased the common stock of Disney between December 10, 2020 through November 8, 2022.

The Complaint alleges, that defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that:

• Disney was suffering decelerating subscriber growth, losses, and cost overruns;
• the true costs incurred in connection with Disney had been concealed by Disney executives by debuting certain content intended for Disney initially on Disney’s legacy distribution channels and then making the shows available on Disney thereafter to improperly shift costs out of the Disney segment;
• Disney had made platform distribution decisions based not on consumer preference, consumer behavior, or the desire to maximize the size of the audience for the content as represented, but based on the desire to hide the full costs of building Disney ‘s content library; and
• Disney was not on track to achieve even the reduced 2024 Disney paid global subscriber and profitability targets, such targets were not achievable, and such estimates lacked a reasonable basis.

On November 8, 2022, Disney reported financial results for the fourth quarter and fiscal year end October 1, 2022, missing analyst estimates by wide margins on both the top and bottom lines. Specifically, Disney’s DTC segment reported a monumental operating loss of $1.47 billion compared to a $630 million loss in the same quarter the prior year while revenue in the segment increased just 8% to $4.9 billion. Disney also reported a decline in its average revenue per Disney subscriber, as more customers subscribed through a discounted bundle with Disney’s other services. Notably, the bundled offering made up about 40% of domestic subscribers, confirming that Disney was relying on short-term promotional efforts to boost subscriber growth while impairing Disney ‘s long-term profitability. On this news, the price of Disney common stock declined more than 13%.

If you purchased Disney securities during the Class Period and would like to receive more information or join the action, please enter your contact information below and click “Submit Your Information.”

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