27 Jun Morris Esformes Discusses the Release of Avengers: Endgame and the Subsequent Rise of Disney’s Stock
The release of Disney’s record-breaking Avengers: Endgame brought $2.7 billion in globally, surpassing Paramount Pictures and 20th Century Fox’s box office hit Titanic, which grossed $2.187 billion back in 1997. Naturally, the Walt Disney Co. saw an increase in its stock prior to and after the release of the widely viewed Marvel franchise film.
And while the release of Avengers: Endgame may have given Disney’s stock a boost, it is also closely paired with the company’s announcement of their streaming service Disney+ at a recent investor’s meeting, a topic I discuss on my blog entitled: Morris Esformes Discusses Disney’s Venture into the Streaming Business.
It is likely the news surrounding Disney+, its announced price and further details of what content will populate the streaming service’s catalogue that played a dominant role in the rise of the stock price. But the historic success of Endgame undoubtedly contributed, as well.
Avengers: Endgame broke box office records drawing $350 million domestically and $1.2 billion worldwide on its opening weekend. Over a 32-day period, it was announced that Avengers: Endgame has replaced Disney’s original “The Lion King,” released in 1994, as one of its most successful box office productions. However, estimates predict that, at best, Endgame will add only about 12 cents per share to Disney’s yearly earnings, a small fraction of the $6.79 in per-share earnings expected for 2019.
“While April’s climb did not quite reach the heights of the 31% gain in January of 1987, it’s incredibly at 25.5% for the month, making it the second highest gain in Walt Disney Co.’s stock market record. And it is being generous with its prosperity, as the crowds gathering at movie theaters across the nation has also given rise to IMAX’s stock as well as those of various chains such as AMC and Cinemark,” reported Tatiana Hullender for Screen Rant.
Disney’s stock enjoyed a slight climb prior to the release of Endgame due to anticipation of the movie’s success and the budget allotted to bringing the Marvel movie to life with top Hollywood actors and actresses, such as Chris Evans, Robert Downey, Jr., Scarlett Johansson and more.
But some analysts attribute the overwhelming first-weekend numbers to the digital age we currently live in. Since Avengers: Endgame is essentially a continuation of Avengers: Infinity War, a movie that ended on a dramatic cliffhanger, many moviegoers may have been drawn to the theatre to not only witness the end of the storyline, but also to avoid the minefield of spoilers that took over the internet immediately after the film’s release. This could be a trend that other film studios could take advantage of going forward in their marketing campaigns.
“Though ‘Endgame’ is far from an end for the Marvel Cinematic Universe, these first 22 films constitute a sprawling achievement, and this weekend’s monumental success is a testament to the world they’ve envisioned, the talent involved, and their collective passion, matched by the irrepressible enthusiasm of fans around the world,” said Alan Horn, Disney Studio chairman.
Marvel movies will continue to be produced and make unprecedented sums of money, as we’ve seen with the Star Wars franchise, Disney+ will be released on November 12, and Disney recently purchased 21st Century Fox’s assets for $71 billion–making the media conglomerate larger and better equipped to handle the legacies of the Marvel films than ever before.
The one major question is if Disney+ will be a strong competitor to the already available media streaming services. Disney, in an effort to gain market share within the streaming space, is taking media giants Netflix, Hulu and Amazon head-on and will undoubtedly shake the market as it hosts all of the Disney classics and new releases, in addition to never before seen content. And while it may present Disney with a significant challenge, Netflix has received mounting pressure to improve the quality of their content and curb subscription costs; currently Netflix is known for taking the market for low- to mid-quality film and television series productions — something that will have to change in order to stay competitive.
It’s a trend of rapid growth and expansion. Disney’s stock is routinely setting new highs and it doesn’t appear it will slow down anytime soon.