Disney’s rising streaming costs push shares to 2-1/2-year low

Shares in Walt Disney Co tumbled 11% to the lowest since March 2020 on Wednesday, as ballooning costs at the entertainment giant’s fast-growing streaming division cast a shadow on strong subscriber additions.

Disney+ has attracted millions of subscribers and will launch an ad-supported tier next month, but executives’ promise of profitability next year and forecast for operating results in the next quarter failed to impress.

The company missed analysts’ expectations for fiscal fourth-quarter earnings, after a $1.5 billion loss in its streaming division.

“Disney’s streaming results are indicative of the tightrope it is walking,” said Fred Boxa, associate director at technology and management consulting firm Arthur D. Little.