The Walt Disney Co. faces another lawsuit accusing management of deliberately deceiving investors about the financial health and long-term prognosis of Disney+, the company’s troubled streaming service.
Shareholders are likely furious over the stock price, which continues to hover near a nine-year low and is now worth less than half of what it was just a few years ago.
The suit claims that in December 2020, Disney executives “repeatedly misled investors” about just how much money Disney+ was losing and that these “wrongful acts and omissions” brought about the “precipitous decline in the market value” of Disney stock.
Among the current and former Disney executives named in the lawsuit are former CEO Bob Chapek, current CEO Bob Iger, and former CFO Christine McCarthy. McCarthy had been with the company for 23 years before exiting unexpectedly in June under bizarre circumstances.
Bob Chapek of Disney talks during the Opening Ceremony of the Invictus Games Orlando 2016 at ESPN Wide World of Sports on May 8, 2016 in Orlando, Florida. (Chris Jackson/Getty Images for Invictus)
At the beginning of December 2020, when all this sleight-of-hand allegedly began, Disney’s stock was worth about $150 a share.
At the time, as we can see in contemporary news reports, Disney claimed it was confident its streaming service would attract 240 million to 260 million subscribers by 2024. On this news, the stock shot up nearly 14 percent. But as of the most recent information available, Disney+ has only 146.7 million worldwide subscribers, which is 100 million lower than predicted. Worse still, that 146.7 million is 18 million fewer subscribers than Disney+ had in the fourth quarter of 2022. The service has been steadily losing subscribers all year.
Back in December 2020, Disney also claimed that Disney+ would be profitable by 2024, but the service is still losing billions.
The suit claims Disney deliberately hid “the true costs” of Disney+ using a scheme to “inappropriately shift [marketing and production] costs” of Disney+ shows to legacy networks like the Disney Channel. The stung shareholders claim this sneaky accounting was sometimes hidden by having shows premiere on Disney cable channels when they were produced for the streaming outlet.
This is the third investor suit to hit Disney:
The complaint filed on Aug. 23 in California federal court is at least the third taking issue with the company’s efforts to boost subscriptions for its streaming platform. It 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 inflate its stock price.
The suit claims that company executives hid the expense and difficulty of maintaining subscriber growth as it suffered “staggering costs” to create content. In an effort to hide losses, the complaint claims, former chief executive Bob Chapek, his lieutenant Kareem Daniel and former CFO Christine McCarthy aired The Mysterious Benedict Society and Doogie Kameāloha, M.D. — which were supposed to be Disney+ originals — on the Disney Channel to make the streaming service appear more successful than it actually was.
People from the Walt Disney Company participate in the annual LA Pride Parade in West Hollywood, California, on June 9, 2019. (DAVID MCNEW/AFP via Getty Images)
When the hype began, Disney’s stock sat at about $150 a share. For nearly a year, the stock hovered around $190 a share. As of yesterday, the stock is only worth $84.40.
So, you can understand why the stockholders might be angry.
Of course, the dog that isn’t barking is the only one that matters. It was right around this time that Disney launched its divisive culture war through every one of its divisions. Transvestites greet children at Disney theme parks. Disney’s “children’s” movies are filled with adult sexuality, including transsexuals and homosexuality. Disney’s TV and streaming shows expose little kids to drag queens and transsexuals. This is the very definition of grooming, and Disney openly grooms little kids. That’s why theme park attendance is down. That’s why Disney+ is a catastrophe. Disney has become a company obsessed with sexual fetishes and identity politics. The betrayal of its family-friendly brand is truly jaw-dropping.
As far as the alleged financial schemes, those appear to have occurred on Chapek before Iger climbed back on board. Both CEOs are responsible for the true cancer, the sexual perversions aimed at little kids that betrayed the company’s customer base of parents who understand that the primary way to raise a healthy, well-balanced child is by protecting their innocence.