The Wrap points out the highs and lows of DWA's stock price:
"We continue to prefer stocks with exposure to TV and advertising-driven assets with higher growth and less earnings volatility than DWA," read a Morgan Stanley report, labeling DreamWorks Animation stock "underweight" compared to its trading price.
The latest downturn came with the studio's latest 3D-animated film, "Megamind," stalling out at the box office short of Street projections, and "How to Train Your Dragon" DVD sales lagging behind forecasts. ...
See, the problem is that DreamWorks Animation has released three (count 'em) disappointing features this year.
First, How to Train Your Dragon rolled out to thunderously favorable reviews, but then made a paltry $493.2 million in the global marketplace (not counting DVDS.)
Then came the very disappointing Shrek Forever After. The media went on and on about how its domestic box office "stalled out." And you'll recall that the feature earned a tepid $737.4 million around the world.
And now comes Megamind, with its very weak half-month at the top of the box office heap. So far its world wide box office total is only $144.4 million, but you never know. It hasn't been released in many foreign markets and it still has months left to under-perform.
You see the problem here, don't you? Animated features are expected to make a half billion dollars, or a billion in Shrek's case, each and every time one gets released. If the movies don't burn up the box office, there is disappointment -- and sagging stock prices -- and the world starts to cave in.
Live-action features have it easy. Expectations are lower.