The changes at Disney -- now solidified by the exit of Nina Jacobson -- were supposed to set off a round of Wall Street anxiety.
After the news last week of upcoming cuts, two analysts downgraded the company. Observers panicked. Disney's stock dropped in after-hours trading, and before the market even opened Thursday morning, the stock sat 3% lower than it did Wednesday evening.
But with a little perspective, investors have come back as bullishly as ever. Nearly a week after the cuts announcement, the stock hasn't dropped -- in fact, it's higher than it was at Thursday's opening.
In the past two days, the stock has jumped 4% -- no small feat for a company that many considered to have reached its peak after a feverish six months.
The cuts and speculation have been intense: reports of a slate that will be reduced by more than half and a vast diminution of non-Disney-branded pictures. So why doesn't the drama make investors as skittish as it does Hollywood?
The continuing power of "Pirates" is one offsetting factor. But there's also a feeling among investors that the cuts are not just a Band-Aid but evidence of a long-term philosophical shift.
And money managers and other Wall Streeters say it's a shift they believe the company needs.
Wall Street tends to love austerity when it's in the name of a higher purpose -- in this case, a renewed emphasis on franchises and tentpoles.
And while analysts at Cowen & Co. and CIBC, who were responsible for last week's downgrades, are piling on, there's a sense that the pro-Disney camp is beginning to fight back. At least one analyst is expected to offer an endorsement in the near future.
The appearance of Steve Jobs on the scene has also brought a sense of calm; one insider said investors feel that if he's going to bring the iTunes model to film, he could do it in a way that's beneficial to Disney.
And the strength of ESPN and ABC continues to hearten investors.
Others note that Disney's cuts are reminiscent of last year's one-time charges and write-offs associated with Miramax: The cuts made for a rocky few earnings calls but helped make 2006 look that much better.
The downgrades weren't the first the company has experienced recently. A month ago, two other analysts, from Citigroup and AG Edwards, dropped their recommendation from "buy" to "neutral."
But the company has remained a stubborn exception to the analyst -- and general market -- malaise. Its stock has performed better in 2006 than that of any other media company besides News Corp. Both are up about 13% since the start of the year.
And while some attributed it to post-Pixar euphoria, the stock's best month this year was May -- more than three months after the acquisition was announced.
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