Dreamworks downgraded

So the L.A. Times money & co. blog ( I’ll post the link later if I remember) is reporting that Dreamworks Animation SKG has been downgraded from the “conviction buy list” by Goldman Sachs and from “buy” to “hold” by Wedbush Morgan Securities.

Apparently, the company will be facing tougher times as Wall Street is anticipating the studio is going to begin to paying more to market it’s films abroad.

Additionally, the article states:

Another expected drag on the bottom line — although great for Glendale and environs — is the company’s plan to spend $85 million over the next two years to expand and improve the Glendale studio, including for 3-D productions. Dreamworks sort of buried that announcement in the earnings press realease.

Now I understand that the U.S. economy is in the dumps right now but I’m not sure I see there being much disruption to the movie industry. If this summer has taught us anything it’s that the movie industry hasn’t felt the crunch quite as strongly (see Dark Knight, Kung Fu Panda, Ironman, etc). I think people are actually going to the movies more often because it tends to be the cheapest for of entertainment out there right now.

To recap, in the words of Mr. Warren Buffet:

Be greedy when others others are fearful and fearful when others are greedy.

C

~ by chrisd21 on July 30, 2008.