The studio led by a high-powered Hollywood exec who’s given millions of dollars to President Barack Obama and other Democrats faced a sell-off on Wednesday as its stock plunged by double digits.
As of 2:00 P.M., DreamWorks Animation’s stock was trading at $20, posting a decline of more than 12 percent on the day. The price marked a 52-week low for the film animation studio run by Democratic mega-donor Jeffrey Katzenberg.
The decline came after “the movie company posted poor quarterly earnings a day before and disclosed a regulatory investigation into a write-down taken about five months earlier,” noted the Hollywood Reporter.
The animation studio was also hit Tuesday with multiple threats of class-action lawsuits, which is par for the course nowadays when a stock makes a dramatic plunge. Law firms on Wednesday were referring to the $13.5 million write-down that DreamWorks Animation took in February after its racing snail film, Turbo, disappointed.
The biggest catalyst driving the stock down on Wednesday, though, was probably the lousy quarterly earnings report from a day earlier, when DreamWorks Animation said it lost 18 cents per share when the average prediction of analysts suggested a loss of 2 cents per share. The company also fell short of revenue expectations.
CEO Jeffrey Katzenberg explained Tuesday that the company hadn’t yet benefited from How to Train Your Dragon 2, in part because it hasn’t been released in China and other big international markets yet. Katzenberg expressed huge confidence not only in Dragon 2 but also the film industry on whole, even speaking of “unprecedented opportunity” in 2015 and 2016, but investors and analysts weren’t buying any of it on Wednesday as the stock not only cratered but did so on massive volume.
Katzenberg is one of the Democratic Party’s leading financiers. He was a top bundler for Obama’s reelection campaign, raising more than half a million dollars for the effort.
He has donated more than $1.8 million in the past, and has visited the Obama White House at least seven times.