Immediately following NASDAQ’s Friday opening bell at 9:30 a.m. ET, DreamWorks Animation SKG Inc. stock (DWA) began trading down, as many analysts expected.
The initial decreases were not much more severe than the after-market trading. At 9:40 a.m. ET (so, 10 minutes of regular trading), DWA was fluctuating around $18.40 per share — down $2.91 from the prior market close, or 13.66 percent.
Pre-market, it was hovering about half a buck higher: At 9:10 a.m. ET, for example, DWA was trading for $18.90 per share — a drop of $2.41 per share, or down 11.31 percent.
By 10 a.m. ET, DWA had seemingly rebounded a bit or stabilized — momentarily at least — trading at $18.93 per share. By 10:15 a.m. ET it rose to $19.39.
DreamWorks shares closed on the NASDAQ up 3.05 percent at the end of day on Thursday, at $21.31 per share. The layoff announcement came an hour before the market closed.
For comparative purposes, the stock’s 52-week range was $19.20 – $35.37. At the time of this writing, a new 52-week low of $18.30 was established on Friday morning.
TheWrap will continue to monitor this change throughout the day — especially the possibly volatile morning period — and update this post accordingly.
The stock slip stems from an announcement DreamWorks Animation made Thursday that the company plans to cut approximately 500 jobs across the board.
The studio currently employs around 2,200 staffers and the cuts would make up about 18 percent of the workforce. DWA also said that it will release just two films per year going forward, down from three.
In a conference call with the media Thursday afternoon, the struggling animation company additionally revealed that top brass — including marketing chief Dawn Taubin, Vice Chairman Lou Coleman and COO Mark Zoradi — would be exiting.
“They have a very risky business model,” Philip Schuman, of financial consultant firm FTI, told TheWrap on Thursday. “They don’t put out a lot of product. What they do put out has to work.”
“I think they’re suffering from some very antiquated approaches,” added Seth Willenson, a valuation analyst specializing in media and entertainment properties.
“It’s a company in a dire situation,” said Rich Greenfield, Media & Tech Analyst at BTIG & Angel Investor. “They’re running out of options. They’re cutting their film slate, dropping executives. I think they’re in a very, very difficult position.”