On Wednesday, Walt Disney (NYS: DIS) stock suffered its worst sell-off in a decade, dropping 13% in a single day. Sales were strong, but investors worried consumer wallets might not be fat enough to keep Disney growing much longer. Result: Wednesday was a bad day for Disney ... but hold onto your portfolios, shareholders. The week isn't over yet.
Mickey Mouse: Supervillain
Two years ago, Disney snagged Marvel Entertainment for a cool $4 billion. Marvel shareholders wept for the loss of their stock, but Disney shareholders roared approval for the House of Mouse. Marvel was the Big Cheese in comics and comics-based movie-making -- and Mickey had deftly stolen it away.
But in doing so, did Disney fall into a trap? Earlier this week, Wired.com reported that Disney has been trapped in a web of negative publicity. Its new subsidiary Marvel Comics is offering comic book retailers the chance to sell a "variant cover" edition of Fear Itself No. 6. All a retailer has to do to get the coveted item is ... rip the covers off of 50 copies of any No. 1 issue from rival DC Comics' Flashpoint line of titles, and send them to Marvel, coupon-style.
The gambit's perfectly legal, of course. The retailers paid for these comics, and would be destroying their own property, essentially turning their DC comics into coupons to acquire a rare Marvel edition. Marvel has even done this before -- successfully -- cajoling envious retailers into destroying tens of thousands of copies of its rival's comics. Still, there's an underhanded feel to the whole gambit. Marvel's clear aim here is to limit readership of DC publications, with the hope of strangling DC's fan base.
It might work ... but it might not. Marvel may have forgotten that by destroying its rivals' work, it's actually making the DC publications rarer -- thus increasing their aftermarket value. This could have the perverse effect of encouraging collectors who might not have bought the DC comics before to rush out and buy them now before they disappear. And that's before we even consider the amount of bad blood and negative publicity Marvel (and Disney) are bringing upon themselves through this dirty tricks campaign.
The moral of today's story? Mice have enough to worry about already, avoiding the traps others set for them. The House of Mouse should focus on building better mousetraps than Time Warner (NYS: TWX) , News Corp (NYS: NWSA) , and DreamWorks Animation (NYS: DWA) churn out -- rather than scurrying around setting traps for itself.
At the time thisarticle was published Will Good triumph? Will Evil meet its deserved end?Add Disney to your Fool Watchlist, and find out.Fool contributorRich Smithdoes not own (or short) shares of any company named above, butMotley Fool newsletter serviceshave recommended buying shares of Walt Disney and DreamWorks. Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has adisclosure policy.
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