While “Avatar: The Way of Water” is making a run at box office fortune and glory, Walt Disney’s stock price has yet to recover from a stock tumble seemingly brought about by the sequel’s slightly softer-than-expected opening weekend.
“Avatar 2’s” $441 million global opening weekend, 16% below the potentially hyperbolic pre-release hopes of a $525 million worldwide launch, wasn’t big enough for Wall Street. The stock tumbled from $90.04 last Friday to $85.76 at market close on Monday, below any other point in 2022 and nearing the 52-week low of $84.69. It has since recovered slightly, closing Thursday with $86.67.
That’s still below the recent “low point” price of $86.75 on Nov. 9, just days before the release of Marvel’s “Black Panther: Wakanda Forever” and days before the company shocked the world by removing Bob Chapek as CEO and reinstating Bob Iger in the role.
The 3D “Avatar” sequel was projected to open with between $150 million and $170 million in North America, with global projections as high as $525 million. However, the film opened with $134 million domestic — plus-74% sans inflation-adjustment from the original $77 million debut weekend for the original “Avatar” 13 Decembers ago — and $441 million worldwide.
The film was also tracking for an over/under $120 million launch in China, a key overseas marketplace where James Cameron films like “Avatar” ($203 million in 2010) and “Titanic” ($145 million for the 3D reissue in 2012) have flourished. However, due to a surge in COVID infections and a shifting status quo whereby most Hollywood films that gain admittance into China gross less than might have been expected before 2020, resulted in an opening weekend of $57 million and a current $70 million-and-counting cume.
A stronger debut in China, as well as a slightly bigger opening weekend in North America — possibly/partially due to audiences waiting until the holiday break when they could more easily get good seats in IMAX, Dolby and related premium large format (PLF) 3D engagements — might have made up the difference between expectations and reality.
It’s not the first time a major Hollywood studio has been penalized by Wall Street due to lower-than-projected opening weekends, even for films that would eventually turn out to be strong global hits.
DreamWorks, back when it was an independent publicly-traded company, was hammered in mid-2005 both for “Shrek 2” selling fewer DVDs than hoped (35 million copies versus 40 million copies) and partially for expectations that “Madagascar” (an original non-sequel animated film that earned $60 million over Memorial Day weekend) would open closer to the $128 million Wednesday-Sunday debut of “Shrek 2” the previous year.
The talking animal toon would leg out to $194 million domestic and $542 million worldwide and spawn two sequels, a spin-off theatrical and a slew of streaming episodic shows.
Several years later, on Nov. 25, 2013, Lionsgate’s stock tumbled 10% on the Monday after the $158 million domestic debut of “The Hunger Games: Catching Fire.” While higher than the $152 million domestic launch for “The Hunger Games” the previous year, it was below at least some pie-in-the-sky projections of $175-$185 million.
Later, the second Jennifer Lawrence-as-Katniss Everdeen actioner legged out to $425 million domestic (the year’s biggest haul, besting the $400 million-plus likes of “Iron Man 3” and “Frozen”) and $865 million worldwide on a $130 million budget.
It remains to be seen if strong word-of-mouth and thus far strong post-debut legs (it crossed $600 million worldwide yesterday and may flirt with $900 million worldwide by the end of Christmas Day with another week of holiday play and little competition in early 2023) will mitigate the damage done to the company’s shareholders.
Unless the film so vastly over performs over the long haul, hard to do when the film’s own director hyperbolically argued that it needed to top $2 billion worldwide to break even, even a blockbuster performance (say, passing “Top Gun: Maverick” and its $1.49 billion cume as this year’s biggest global grosser) could do little more than restore Disney’s stock price to its pre-“Avatar 2” level.
