Robbins Geller Rudman & Dowd LLP files a class action lawsuit against The Walt Disney Company for violating the Securities Exchange Act of 1934
May 13, 2023
Robbins Geller Rudman & Dowd LLP, a leading shareholder rights law firm, has announced the filing of a class action lawsuit against The Walt Disney Company. The suit seeks to represent shareholders who bought Disney common stock between December 10, 2020 and November 8, 2022. The lawsuit, captioned 272 Labor-Management Pension Fund v. The Walt Disney Company, charges Disney and some of its top executives with violating the Securities Exchange Act of 1934.
Disney is involved in the production and distribution of film and television content, including direct-to-consumer streaming services through Disney+. According to the lawsuit, Disney made false and misleading statements and failed to disclose significant details throughout the Class Period. The lawsuit alleges that Disney+ was experiencing slowing subscriber growth, losses, and cost overruns, which the company concealed by debuting some content on Disney's legacy channels before releasing it on Disney+. The defendants' platform distribution decisions were allegedly based on cost concerns rather than consumer behavior or preference. The lawsuit also claims that Disney would not achieve its global subscriber or profitability targets for Disney+ by 2024.
Disney's fourth-quarter financial results, announced on November 8, 2022, showed that the company had missed analyst estimates by a considerable margin on both the top and bottom lines. Disney's DTC segment incurred an operating loss of $1.47 billion, compared to a $630 million loss in the same quarter the prior year, while revenue in the segment increased only 8% to $4.9 billion. The report also revealed a decline in Disney+'s average revenue per subscriber. The bundled offering made up roughly 40% of domestic subscribers, indicating that the company was relying on short-term promotions to boost subscriber growth while undermining Disney+'s long-term profitability. Disney's share price declined over 13% on this news.
Any investor who purchased Disney common stock during the Class Period is eligible to seek appointment as lead plaintiff of the Disney class action lawsuit under the Private Securities Litigation Reform Act of 1995. The lead plaintiff acts on behalf of all other class members in directing the lawsuit and can select a law firm of their choice to litigate the case. An investor's ability to participate in any future settlement or recovery is not dependent on being appointed as lead plaintiff.
The plaintiff is represented by Robbins Geller, a law firm with extensive experience in prosecuting investor class actions, including those involving financial fraud. Interested parties can view a copy of the complaint and learn more about the lawsuit on the firm's website. Investors who wish to serve as lead plaintiff must file a motion with the court by July 11, 2023. J.C. Sanchez, an attorney at Robbins Geller, can provide further information by phone or email.
Members of LevelFields received the alert of this event on May 12, 8:50 PM ET
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