- Mulan secured $23.2 million over the weekend at box offices in China in a disappointing debut
- A $200 million movie faced backlash by political controversy and mixed reviews in China
- The Mulan failure is likely to invite additional pressure on DIS stock
Shares of Disney (NYSE: DIS) moved slightly lower this week after the release of blockbuster live-action version of Mulan disappointed in China.
Fundamental analysis: Disappointing debut
Mulan secured $23.2 million over the weekend at box offices in China, which is a pretty week opening for a big-budget film about a Chinese hero. Even Christopher Nolan’s “Tenet” pulled in $29.8 million in China a week earlier than Mulan, which was designed to draw large audiences in the country.
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The movie, which had a budget of $200 million, faced backlash by political controversy and mixed reviews in China. Mulan was scheduled to debut in March but got delayed due to the coronavirus pandemic, which has hurt cinemas globally.
“That’s a disappointing debut,” said Jeff Bock, senior media analyst at Exhibitor Relations Co. “Disney made this film for Chinese audiences and they saw it pretty much fall flat.”
The film faced criticism at overseas social media and boycott requests over its star’s support for Hong Kong police. Furthermore, a part of Mulan was shot in the Xinjiang region, where China’s taking drastic measures against ethnic Uighurs and other Muslims, facing sharp opposition from certain governments and rights groups.
Chinese government instructed the media not to cover Mulan’s release in the wake of the backlash, according to four sources familiar with the matter. Mulan pulled in $37.6 million in total worldwide box office receipts through Sunday across the seven territories where the film is being screened.
Disney screened Mulan with an unusual approach as a large number of worldwide theatres is still closed due to Covid-19. Disney made the film available on its streaming platform Disney+ in the countries where the service is supported. In countries where Disney+ isn’t available, such as China, Mulan debuted in cinemas.
Technical analysis: Wedge narrowing
Shares of Disney closed in the negative territory last week despite trading nearly 5% higher over the course of the week. The buyers are obviously struggling to keep its head above $136 after failing to close above this level in the third consecutive week.
The Mulan fiasco is likely to invite additional pressure on DIS stock, increasing chances of a downward break. Therefore, it is difficult recommending DIS stock as a buy giving the disappointing debut for Mulan. On the downside, the intraweekly support sits at $127.50.
Walt Disney’s remake of Mulan recorded weak box office sales in China, securing only $23.2 million over the weekend. Disney share price is now likely to trade under pressure as expectations for Mulan’s debut in China were high.