Here's Why Investors Are Fleeing From Entertainment Stocks -- And Why That May Change
Wall Street hasn’t been kind to Hollywood entertainment giants this year — but that may be about to change.
Disney, once thought of as a stock-market pace car setting the tempo for the rest of the industry, has been one of the Dow Jones industrial average’s biggest dogs in 2022, with share prices dropping 28% since the start of the year. (The stock closed at $112.32 on Thursday.)
The overall market has taken a beating this year: The S&P 500 has slumped 20%, the tech-laden Nasdaq is down 27%, and the Dow has tanked 14%. But Hollywood conglomerates have fared even worse: Paramount Global shares have dropped 29%, Lionsgate fell 45%, while Warner Bros. Discovery and Netflix shares have been stunningly sliced by more than half. Fox, which has declined a relatively modest 12%, has ironically been the one Hollywood stock to break out from the pack simply because the Murdoch-led media empire has focused on terrestrial and cable operations instead of going all in on streaming.
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Still, trading patterns are flashing signals that a comeback may be ahead. There’s been heavier-than-usual volume on the number of shares traded since Sept. 1 in those six biggest entertainment companies. And that’s a sign that investors are wading back into the entertainment sector with a bit more financial swagger.