Psylocke Posted August 30, 2023 Posted August 30, 2023 Quote Disney shareholders accused the media giant’s leadership of misleading investors by engaging in “a fraudulent scheme designed to hide the extent of Disney+ losses,” according to a new lawsuit. The complaint, filed by New Jersey-based Stourbridge Investments on Aug. 23 in Delaware federal court, claims Disney management under then-CEO Bob Chapek tried to conceal the “staggering costs” it incurred while attempting to boost its subscriber count and promise profitability by the end of 2024. The suit was lodged the day before Disney shares closed at a nine-year low of $82.47 per share — far below the $100 the stock traded at after Bob Iger replaced the ousted Chapek last November. The stock was at $84.16 in midday trading on Wednesday. Investors claimed they were deliberately duped by statements from Chapek — specifically one from December 2020 — which boasted how “Disney+ has exceeded our wildest expectations” and “bolstered our confidence” despite suspicious profitability forecasts. According to The Hollywood Reporter, the Mouse House faces an identical investor suit over an alleged “cost-shifting scheme” in its streaming division and claims that it obstructed a deal between TSG Entertainment Finance and 20th Century Studios, which Disney owns, to “prop up” Disney+ and juice its stock price. In the Stourbridge Investments suit, the plaintiff not only named Chapek, who ran the Disney from 2020 to 2022, in the lawsuit, but also Iger, along with former chief financial officer Christine McCarthy and ex-Media & Entertainment Distribution chairman Kareem Daniels. “To conceal these adverse facts, defendants engaged in a fraudulent scheme designed to hide the extent of Disney+ losses and to make the growth trajectory of Disney+ subscribers appear sustainable and 2024 Disney+ targets appear achievable when they were not,” the shareholder said. Last year, the company reported that it missed analyst estimates by wide margins on revenue, sales and earnings. “The company also reported a decline in its average revenue per Disney+ subscriber, as more customers subscribed through a discounted bundle with the Company’s other services,” the complaint said. “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 the platform’s long-term profitability.” The company has taken a $3.7 billion hit over the past 12 months ending June 30 from its streaming services, which include Disney+, ESPN+ and Hulu, Forbes reported. X 1
JustHoran Posted August 30, 2023 Posted August 30, 2023 Disney is just the first to get caught, they are all doing this lbr
kataraqueen Posted August 30, 2023 Posted August 30, 2023 Fk i wish i knew it had dropped that low totally wouldve bought some disney practically has monopolized western cartoon productions, if there's ONE thing people are willing to spend money on it's their children. Disney+ is fine
Johnny Jacobs Posted August 30, 2023 Posted August 30, 2023 (edited) They are losing millions of subs in months and their movies aint doing good either. Why was anyone surprised? Edited August 30, 2023 by Johnny Jacobs
JonginBey Posted August 30, 2023 Posted August 30, 2023 One good about the pandemic is that it really helped weed the rats OUT.
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