From Disney to Netflix to Warner Bros. Until Discovery, media and tech stocks lose faith in streaming in 2022, global subscriber growth stagnates and macroeconomic concerns force content spending calculations for entertainment’s biggest players.
For 2022, how-it-started/how-it-is-faring comparisons for the biggest media stocks aren’t pretty in a general downturn for equities. After trading ended on December 28, the Dow Jones Industrial Average was down nearly 10% for the year. The New York Stock Exchange Composite slipped 12%. The S&P 500 fell 21%. The technology-focused Nasdaq index fell 35%.
With only three days left in the year, there’s no doubt that 2022 has been a brutal year for media investors. Unfortunately, the picture for 2023 doesn’t look any better so far. The growing macroeconomic storm clouds that emerged in the current quarter set the stage for a difficult first half. Market watchers see the coming 12 months as a time to reset after all the unexpected economic stimulus efforts spurred by the pandemic.
“Consumers with a cushion of savings from the lockdown have mostly exhausted their excess post-Covid cash and for the first time are suffering a broad negative asset impact from all assets simultaneously – be it housing, bonds, equities, alternative/private investments or crypto,” said Dubravko Lakos. -Bujas, global head of equity macro research at JPMorgan. “This proverbial snowball should gain momentum next year as consumers and corporates more meaningfully reduce discretionary spending and capital investment.”
Zooming in on Hollywood and the tech sector for 2022, year-end returns for Big Tech and Big Media were grim.
Disney stock started the year at $156.76 per share on Jan. 3 and closed Dec. 28 at $84.17, a slide of 46% — an eye-popping one for one pillar of the Dow 30 Index. Netflix shed more than 50% of its value, from $597.37 to $276.88 (-54%). Comcast changed from $50.74 to $34.62 (-32%). Paramount rose from $32.24 to $16.11 (-50%). AMC Networks stumbled from $37.2 to $14.48 (-61%). Roku crashed from $230.63 to $38.80 (-83%).
Warner Bros. Discovery shares have had quite a ride this year. The year began with Discovery and AT&T shares trading up until the spinoff deal was completed on April 11. Discovery shares closed at $24.43 on April 8, and AT&T shares closed at $18.23. AT&T’s stock price rose a few months after the deal was completed.
The telco giant plunged to a low of $14.63 in mid-October but recovered somewhat in November and December. For the year, AT&T is off 2%, closing Dec. 28 at $18.25. Meanwhile, newly minted Warner Bros. Discovery stock ended its first day of trading on April 11 at $24.78 (after opening at $24.08), but Shield’s studio hasn’t closed above $20 since April 25. For the year, WB Discovery shares are down 63%.
Fox Corp. Dropped from $35.13 to $28.15 (-20%). Amazon fell from $170.4 to $81.82 (-52%). and Apple from $182.01 to $126.04 (-31%).
Notably, one of the few stocks starting in 2022 is TV station group giant Nextstar ($153.41 to $173.33, or +13%), which has spent the year adapting its CW network strategy with its recent acquisition. .
The hits came in waves throughout the year, first reaching a breaking point with a historically brutal trading day on May 18, when the Dow Jones plunged 1,164.52 points, or 3.57%, after a month-long correction.
Since then, Disney, Netflix, Warner Bros. Discovery and Comcast have wiped out tens of billions of dollars in market capitalization, as have tech titans like Amazon and Apple.
Concerns about inflation only grew on Wall Street, with US stocks hitting their biggest one-day decline since June 13, 2020. The losses came after the US Bureau of Labor Statistics released data for August 2022, which showed the consumer price index rose 8.3% year over year for the month (down from 8.5% in July and slightly down from a four-decade high of 9.1% in June). The jump in CPI came despite gas prices falling 10.6% in the month, which failed to offset rising prices for rent, health care, food, and electricity and natural gas.
While getting back to where they started the year is a goal that will likely be unattainable for some companies for quite some time, gains here and there (resulting from CEO changes or customer acquisitions) have shown that much is left up in the air in the first quarter. It’s 2023, when these media giants will release their full-year earnings to investors and hope the tide turns.
2022: Annus Horribilis of Media
Stock prices for the biggest content players took double-digit swan dives this year
Amazon (AMZN) – Down 52% for the year
Last price January 3: $170.4
Last price December 28: $81.82
AMC Network (AMCX) – less than 61%
January 3: $37.2
December 28: $14.48
Apple (AAPL) – 31% less
January 3: $182.01
December 28: $126.04
Comcast (CMCSA) – 32% less
January 3: $50.74
December 28: $34.62
The Walt Disney Company (DIS) – down 46%
January 3: $156.76
December 28: $84.17
Fox Corporation (Fox) – 20% less
January 3: $35.13
December 28: $28.15
Lionsgate (LGF-A) – less than 66%
January 3: $17.07
Dec. 28: $5.49
Netflix (NFLX) – less than 54%
January 3: $597.37
December 28: $276.88
Nextstar (NXST) – 13% up
January 3: $153.41
December 28: $173.33
Paramount Global (PARA) – 50% less
January 3: $32.24
December 28: $16.11
ROKU – less than 83%
January 3: $230.63
December 28: $38.80
Warner Bros. Discovery (WBD) – Down 64% since April 11
April 11: $24.78
December 28: $8.87