What Happened?
Shares of digital storytelling platform WEBTOON (NASDAQ: WBTN) jumped 28.8% in the morning session after the company announced a deal with Walt Disney to create a new online platform for the media giant's comic library and that Disney would take a 2% equity stake in the company.
The partnership will see the creation of a new digital platform designed to host Disney's extensive library of over 35,000 comics, including iconic franchises like "Marvel" and "Star Wars." As part of the deal, Disney will acquire a 2% equity interest in Webtoon, signaling a strong vote of confidence in the platform's future. Investors reacted enthusiastically to the collaboration, which is expected to significantly broaden Webtoon's audience and content offerings, although both the investment and collaboration agreement have yet to be finalized.
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What Is The Market Telling Us
WEBTOON’s shares are extremely volatile and have had 38 moves greater than 5% over the last year. But moves this big are rare even for WEBTOON and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 6 days ago when the stock dropped 6.4% on the news that markets pulled back, reversing early gains, as investor sentiment remained cautious despite a softer-than-expected inflation reading.
Stocks rose in the morning session after an unexpected drop in the Producer Price Index (PPI) for August signaled easing inflation and raised expectations for a potential Federal Reserve interest rate cut. The U.S. Bureau of Labor Statistics reported that the PPI, which measures wholesale prices, edged down 0.1% last month, contrary to analyst expectations for a 0.3% rise. This data gives the Federal Reserve more flexibility to consider lowering interest rates to stimulate the economy.
WEBTOON is up 44.8% since the beginning of the year, and at $19.68 per share, has set a new 52-week high. Investors who bought $1,000 worth of WEBTOON’s shares at the IPO in June 2024 would now be looking at an investment worth $855.65.
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