“Avatar 2: The Way of Water” is making a push for box. Walt Disney’s stock price has collapse triggered by the sequel’s expected opening weekend.
Wall Street wasn’t happy with “Avatar 2’s” $441 million global opening weekend, which was 16% less than pre-release expectations of a $525 million global launch. At Monday’s market closing, the stock has dropped from $90.04 on last Friday to $85.76, below any other level in 2022 and getting close to the previous 52-week low of $84.69. Since then, it has slightly improved, ending Thursday with $86.67.
Just days before the release of Marvel’s “Black Panther: Wakanda Forever” and days before the business surprised the globe by ousting Bob Chapek as CEO and reinstalling Bob Iger in the position, that price is still below the most recent “low point” pricing of $86.75 on Nov. 9.
With worldwide forecasts as high as $525 million, the 3D “Avatar 2” was expected to debut with between $150 million and $170 million in North America. However, the movie debuted with $134 million domestically, up 74% without accounting for inflation from the original “Avatar 2’s” $77 million opening weekend 13 Decembers earlier, and $441 million globally.
As a prominent international market where James Cameron pictures like “Avatar” ($203 million in 2010) and “Titanic” ($145 million for the 3D reissue in 2012) have thrived, Avatar 2 was likewise tracking for an over/under $120 million opening there. However, a rise in COVID infections and a changing status quo, where most Hollywood movies that are allowed into China make less money than may have been anticipated before 2020, “Avatar 2” led to a $57 million opening weekend and a current $70 million and growing.
The difference between expectations and reality may have been made up by a stronger opening weekend in North America and a stronger debut in China, possibly/partially as a result of 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.
Wall Street has already fined a major Hollywood studio for lower-than-expected opening weekends, even for movies that would go on to become huge international successes.
When DreamWorks was publicly traded company, it took a beating in the middle of 2005 for “Shrek 2” selling fewer DVDs than anticipated (35 million versus 40 million copies) and in part because it was expected that “Madagascar,” an original non-sequel animated film that made $60 million over Memorial Day weekend, would open to a higher total than the $128 million Wednesday-Sunday opening of “Shrek 2” the previous year.
The talking animal cartoon collected domestic sales of $194 million and international sales of $542 million. It has inspired two sequels, a theatrical spin-off, and several streaming episodic episodes.
A few years later, on November 25, 2013, following the Monday “The Hunger Games: Catching Fire’s” $158 million domestic opening, Lionsgate’s shares fell 10%. Although it was greater than “The Hunger Games'” $152 million domestic debut the year before, it fell short of some optimistic estimates of $175-$185 million.
Katniss Everdeen action film starring Jennifer Lawrence eventually made $425 million domestically (the year’s largest haul, topping “Iron Man 3” and “Frozen,” which both made over $400 million) and $865 million globally on a $130 million budget.
It is yet to be seen whether positive word-of-mouth and so far strong post-debut legs will lessen the harm done to the company’s shareholders (it crossed $600 million globally yesterday and may flirt with $900 million globally by the end of Christmas Day with another week of holiday play and little competition in early 2023)
Even a blockbuster performance (“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 unless the film so vastly over performs over the long haul, which is hard to do when the Avatar 2 own director hyperbolically argued that it needed to top $2 billion worldwide to break even.
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