Disney Stock Surges to Record Highs as it Threatens Netflix
Walt Disney (DIS) investors were all ears on Friday when the entertainment behemoth unveiled pricing and other details surrounding its new Netflix-competitor, Disney+. The company announced that its upcoming video-streaming service would be priced at $6.99 per month. This is clearly an aggressive move on Netflix’s significantly higher pricing model.
The Disney+ subscription would be two dollars cheaper than Netflix’s most basic, non-HD subscription. And it would include an increasingly comprehensive library of video content. Disney is slated to roll out its new service later this year, on November 12. The company is targeting 60-90 million subscribers by 2024.
Investors Rush to Buy Disney Stock
As shown on the 10-year DIS chart above, investors were in a mad rush to buy shares of Disney on Friday. The stock shot up 11.5% to slightly above $130/share by the market close. This far surpassed the stock’s previous 2015 peak, establishing a new all-time high in the process. Friday’s big breakout shatters the long-term consolidation that had been in place since mid-2015, roughly between the $90-level to the downside and the $120-level to the upside.
What May Be Next for DIS?
The big question now is whether this massive surge will last. Disney investors have a lot of time between now and the Disney+ launch to digest and evaluate the prospects of the new service. There will be much to think about, given Netflix’s sheer market dominance at the moment.
While the future currently looks bright for Disney+, one thing can be reasonably assured – Netflix will not take this threat lying down. If investors start doubting the Netflix-killing potential of Disney+, DIS stock could very well take a serious tumble.
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Senior Technical Analyst at The Technicals
As a momentum stock trader, Luke focuses mostly on strong market moves. Luke has been trading the markets since the early 2000s, but still gets excited by big movers. Whether a surging large-cap tech company or meteoric penny stock, Luke tracks and trades winners. A technical analysis purist, Luke authors many of our Top Stocks & ETFs reports. Contact Luke