In the five years leading up to their peak in March 2021, Walt Disney (NYSE: DIS) shares were up 106%. The media and entertainment giant was clearly a winning opportunity for the investment community. It helped that the overall market was experiencing a post-COVID surge.
It hasn't been a fun story in the last five and a half years. The consumer discretionary stock currently trades 47% below its all-time high (as of Sept. 17). For such a storied business that has a strong presence in its markets, this has been a worrying trend.
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"Act 2" is the global rollout. Continue » Is Disney a buy, sell, or hold right now? One of the reasons that the stock performed so poorly in recent years might be because of the changing media landscape.
Thanks to the pioneering success of Alphabet's YouTube and Netflix, streaming video entertainment has now become prevalent. This transition has had a negative impact on Disney's legacy operations. Known for its ABC and ESPN channels, Disney dominates the cable-TV industry.
But with cable subscribers declining every year after reaching a peak of more than 100 million households in the U.S. around 2010, this segment has been a headwind to Disney's financials, even though it remains firmly profitable. It's impossible to know how long the industry's fall will go on. Additionally, no one has any clue if things will eventually stabilize.
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