"Rise of the Guardians" lackluster opening has damaged DreamWorks Animation's stock price
DreamWorks Animation stock dropped more than 5 percent to $17.11 when markets closed on Monday amid investor alarm over the tepid debut of "Rise of the Guardians."
Shares of the animation studio were trading at $17.11 when the final bell rang, down substantially from its Friday close of $18.05. The stock rebounded slightly in after-hours trading and was selling for $17.16 as the clock neared 5:30 p.m. on the East Coast.
The bleeding started after the CG-animated offering managed to gross only $32.6 million over the five-day holiday. That was one of the most anemic debuts for a DreamWorks Animation film in recent history, even as the overall box office shattered Thanksgiving-weekend records.
"Rise of the Guardians" centers on a group of mythical creatures including the Easter Bunny and Santa Claus who join together to prevent the Bogeyman from robbing the world's children of hope. It cost an estimated $145 million to produce and now faces an uphill climb to profitability.
Analysts polled by TheWrap earlier Monday said the weaker than expected debut of "Rise of the Guardians" exposed DreamWorks Animation's need to diversify beyond the slate of two or three films it releases annually. That is something the company is trying to accomplish; having recently unveiled plans to build an entertainment district with shops and theaters in Shanghai as part of a Chinese joint venture. DreamWorks Animation will also release television shows and animated films targeted to China and increase the number of major animated releases it debuts each year.
"It’s bad, in the sense that it’s probably one of the very few films DreamWorks will end up taking a loss on," Tony Wible, an analyst at Janney Montgomery Scott, told TheWrap. "The good news for the stock is that expectations have been flushed out and reset at a new level."