Media’s Annus Horribilis: Investors Batter Shares of Disney, Netflix, WB Discovery, Amazon and More in 2022

From Disney to Netflix to Warner Bros. Discovery, media and tech stocks were pummeled in 2022 as faith in streaming waned, global subscriber growth stalled and macroeconomic concerns forced a reckoning on content spending for entertainment’s largest players.

For 2022, the how-it-started/how-it’s-going comparisons for the biggest media stocks are not pretty amid a general downturn for equities. As of the close of trading on Dec. 28, the Dow Jones Industrial Average is down nearly 10% for the year. The New York Stock Exchange Composite has slipped 12%. The S&P 500 has fallen 21%. The tech-centric Nasdaq Index has tumbled a whopping 35%.

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With just three days left in the year, there’s no doubt that 2022 was a brutal year for media investors. Unfortunately, the 2023 picture doesn’t look any better so far. The growing macroeconomic storm clouds that emerged in the current quarter have set the stage for a tough first half. Market watchers see the coming 12 months as a time for reset after all the unpredictable economic stimulus efforts spurred by the pandemic.

“Consumers with a cushion of savings from lockdown have mostly exhausted their post-COVID excess cash and for the first time are getting hit by a broadening negative wealth effect from all assets simultaneously — whether that’s housing, bonds, equities, alternative/private investments or crypto,” said Dubravko Lakos-Bujas, JPMorgan’s global head of equity macro research. “This proverbial snowball should continue to gain momentum next year as consumers and corporates more meaningfully cut discretionary spending and capital investments.”

Zooming in on Hollywood and the tech sector for 2022, the year-end yield for Big Tech and Big Media was grim.

Disney stock opened the year at $156.76 per share on Jan. 3, and closed Dec. 28 at $84.17, a slide of 46% — an eye-popping swoon for a pillar of the Dow 30 index. Netflix sloughed off more than 50% of its value, slumping from $597.37 to $276.88 (-54%). Comcast changed from $50.74 to $34.62 (-32%). Paramount went 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 had quite a journey this year. The year began with Discovery and AT&T shares trading separately until the spinoff deal was completed on April 11. Discovery shares closed April 8 at $24.43 while AT&T shares closed at $18.23. AT&T’s stock price inched up in the months after the transaction was completed.

The telco giant then plunged to a low of $14.63 in mid-October but rebounded some in November and December. For the year, AT&T is off 2%, closing Dec. 28 at $18.25. Meanwhile, the newly minted Warner Bros. Discovery stock ended its first day of trading on April 11 at $24.78 (after opening at $24.08), but the studio of the shield hasn’t closed above $20 since April 25. For the year, WB Discovery shares are down 63%.

Fox Corp. slid from $35.13 to $28.15 (-20%). Amazon has gone from $170.4 to $81.82 (-52%). And Apple went from $182.01 to $126.04 (-31%).

Notably, one of the few stocks that is up from where it started 2022 is that of TV station group giant Nexstar ($153.41 to $173.33, or +13%), which has spent the year adapting its strategy with its recent acquisition of the CW Network.

The hits came in waves throughout the year, first reaching a breaking point with an historically brutal trading day May 18, when the Dow Jones plunged 1,164.52 points, or 3.57%, following a months-long correction.

Since that point, Disney, Netflix, Warner Bros. Discovery and Comcast have seen tens of billions of dollars in market capitalization wiped out, as have tech titans like Amazon and Apple.

Worries over inflation have only mounted on Wall Street, with U.S. stocks hitting their biggest one-day decline since June 2020 on Sept. 13. Those losses came after the U.S. Bureau of Labor Statistics released data for August 2022, showing that the Consumer Price Index for the month increased 8.3% year-over-year (down only slightly from 8.5% in July and from the four-decade-high 9.1% in June). The jump in the CPI was despite a 10.6% drop in gas prices for the month, which failed to offset rising prices for rent, healthcare, food, and electricity and natural gas.

While climbing back to where they started the year is a goal that will likely be unattainable for quite some time for several companies, gains here and there (results of changing CEOs or recovering subscribers) have shown much is left up in the air going into Q1 of 2023, when these media giants will reveal to investors their full-year earnings and hope for the tide to turn.

2022: MEDIA’S ANNUS HORRIBILIS

Stock prices for the largest content players took double-digit swan dives this year

Amazon (AMZN) – down 52% for the year
Closing price Jan. 3: $170.4
Closing price Dec. 28: $81.82

AMC Networks (AMCX) – down 61%
Jan. 3: $37.2
Dec. 28: $14.48

Apple (AAPL) – down 31%
Jan. 3: $182.01
Dec. 28: $126.04

Comcast (CMCSA) – down 32%
Jan. 3: $50.74
Dec. 28: $34.62

Walt Disney Company (DIS) – down 46%
Jan. 3: $156.76
Dec. 28: $84.17

Fox Corp. (FOX) – down 20%
Jan. 3: $35.13
Dec. 28: $28.15

Lionsgate (LGF-A) – down 66%
Jan. 3: $17.07
Dec. 28: $5.49

Netflix (NFLX) – down 54%
Jan. 3: $597.37
Dec. 28: $276.88

Nexstar (NXST) – up 13%
Jan. 3: $153.41
Dec. 28: $173.33

Paramount Global (PARA) – down 50%
Jan. 3: $32.24
Dec. 28: $16.11

Roku (ROKU) – down 83%
Jan. 3: $230.63
Dec. 28: $38.80

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