Disney and the New 'Tron': Are Investors Excited?

Posted Dec 17th 2010 5:30PM by Steven Mallas
Filed under: Walt Disney (DIS), Film

Here we go again. It's another big movie weekend for The Walt Disney Company (DIS). The sequel to a science-fiction classic from the early '80s hits theaters today. The marketing for Tron: Legacy is everywhere right now (or it appears that way, at least). There are many news pieces musing about the importance of the flick to the studio. Question is, what does Wall Street think?

At the moment (about ninety minutes away from the closing bell), shares of Disney are down a penny to $37. That's exactly one dollar away from the 52-week high. The market as a whole isn't too exciting this afternoon anyway, but still, I would have liked to have seen a little more buying interest in the stock ahead of the movie (I'm a shareholder of the company).

Then again, it probably wouldn't have mattered. A short-term move today could easily have been taken away on Monday. I guess what I'm saying is I want to see more interest in a stock of mine that is having trouble getting past the $38 resistance point.

I'm not sure the new Tron is going to be able to bring better price action. I've read commentary suggesting that people aren't necessarily thrilled about the project. I've also perused reviews that aren't exactly glowing.

I'm hoping for at least a $50 million opening, but Daniel Frankel over at TheWrap seems to believe that such a figure might be disappointing. He's probably correct: his article says that the budget and marketing costs for the film possibly total over $300 million. Problem is, this doesn't feel like a better-than-$50-million-opening-weekend piece of celluloid, so $50 million held an appeal to me.

Whatever number Tron: Legacy opens with, it will need to thoroughly connect with audiences to ensure prosperous subsequent weekends. CEO Bob Iger has a lot riding on this bet, especially after recent issues at the studio's marketing department. Not only that, but the movie segment can be a significant driver of shareholder value. Of course, whenever you have a not-cheap budget to amortize, driving that value can be a difficult thing. I pray the crowds come out to support this return to The Grid.

Disclosure: I own Disney; positions can change without notice.