What happened
Walt Disney (DIS 0.92%) might be the company that operates "The Happiest Place on Earth," but its stock didn't produce much joy on Monday. It fell in excess of 4%, a notably worse performance than the 0.9% dip of the S&P 500 index, due to the perceived underperformance of a prominent new film.
So what
Avatar: The Way of Water, the long-awaited sequel to the 2009 blockbuster Avatar, began its theatrical run on Friday. Across the film's all-important opening weekend, it grossed $134 million in domestic ticket sales.
$134 million would be considered an excellent product launch by most companies, but Disney is not most companies. The entertainment giant was estimating that the movie would open at $135 million to $150 million. Industry analysts were modeling even higher numbers off advance ticket sales, with an average $175 million projection.
Disney is a company that needs a clear and ambiguous win, as its performance hasn't been overly impressive recently. In a sign that things weren't going swimmingly, late last month, the company replaced CEO Bob Chapek with his predecessor Robert Iger. The move shocked investors and analysts, not least because Chapek served a relatively short tenure at the usually stable Disney.
Now what
As a modern entertainment conglomerate, Disney doesn't live and die solely by film releases -- its theme park business is massive, of course, as are its TV operations. Yet these days, Disney investors are hungry for good, even spectacular news about their company, and with Avatar: The Way of Water's initial performance, they didn't get it. This isn't exactly a make-or-break for "The Mouse," but it's not an inspiring development either.
