(Reuters) – Shares of Walt Disney fell 3.9% on Thursday, closing at their lowest level in nearly nine years, with some investors betting on the possibility of another drop in prices in the next few months.
Disney shareholders are scrutinizing the company’s turnaround plan after chairman Bob Iger promised earlier this month a combination of higher prices across its streaming properties, more advertising and cost cuts to lift the business.
On Thursday, Disney options were busier than usual with about 321,000 contracts trading, or 1.4 times average daily volume, according to data from options analytics firm Trade Alert.
Trading sentiment leaned towards bearish bets with put options that would protect against a drop in the stock below 80 by mid-September and mid-October were among the most traded contracts.
Put options convey the right to sell shares at a fixed price in the future. Disney stock was also weighed down by weakness in the broader market as investors became wary ahead of US Federal Reserve Chairman Jerome Powell’s speech later this week.
In Disney’s August 9 earnings report, Iger acknowledged that the entertainment company faces a “challenging environment” in the near term and that the company’s shares have fallen more than 5% since then.
Disney stock closed at $82.47, its lowest level since October 16, 2014.
(Reporting by Yuvraj Malik in Bengaluru and Saqib Ahmed in New York; Additional reporting by Leroy Liu; Editing by Krishna Chandra Elory)
