Top Nav

Disney (DIS) Investors Hate Star Wars

Ian Wyatt

Star Wars fanatics are jumping for joy at news of the classic series revival today. Disney (NYSE: DIS) investors aren’t so enthused.

Disney shares fell 2% today after the company announced it was buying Lucasfilm, the production company that produced all six Star Wars films, for a cool $4 billion. Plans for another three Star Wars films are already in the works – “Episode 7” is already scheduled for release in 2015.

Star Wars is undoubtedly one of the most profitable franchises in movie history. The previous six films grossed nearly $4.5 billion in worldwide box office sales.

However, the last three movies didn’t garner the critical acclaim of the earlier films. But are bad reviews what prompted some Disney investors to sell their shares today? Probably not.

Bad timing was probably the larger culprit, given that the announcement came the day after one of the worst natural disasters the East Coast has ever seen.

Some analysts also questioned whether Disney overpaid for their Lucasfilm rights. Also, Disney isn’t likely to see much revenue from its Lucasfilm purchase for a little while.

Disney investors are surely hoping that the company’s Lucasfilm purchase pays off the way its 2009 buyout of Marvel Entertainment has. Disney bought Marvel for the same $4 billion price. That allows it to produce comic-book movies like “The Avengers,” which this year became the third-highest grossing move of all-time.

Despite today’s decline, Disney shares are still having a good year. The stock is up 28% in 2012.

Income and Prosperity Offer

Income & Prosperity is designed to help you seek out the safest income opportunities and discover an entire world of dividend investments. This free newsletter has a laser-like focus on one issue and one issue only: how can investors near or in retirement generate more income. Each day, you'll receive our best investment idea - skewed towards safe income - but also including lesser known opportunities to grow your wealth while keeping it out of harm's way.
You've successfully subscribed, click the link in your email to confirm your subscription.
There was an error, and you have not been subscribed, please try again.