Fitbit Inc fka FIT

[JLS]

If misunderstood, not uncommon.

Disney (DSN) shares got hammered several months ago because of stories of loosing ESPN subscribers. And numbers were quoted related to the amount of loss.

The problem with that story was that the people breaking the story were only using U.S. subscription numbers. They conveniently, or stupidly, forgot that Disney supplies ESPN worldwide. As it turns out, international subscriptions increased by almost enough to wipe out the U.S. decreases.

So yes, DIS lost ESPN subscribers, but only a tiny fraction of their total (U.S. + World) subscribers.

But wait, there's more. Disney also raised subscription rates. The amount of the raise would be more than enough to compensate for lost customers. In fact, it could be that the raise in subscription rates actually caused the reduction in users.

In economics, the process of determining the optimum point of pricing is referred to as seeking the point of diminishing returns. That's what a good business manager would always try to achieve because that's where profits are maximized. How do you do that: raise prices until total revenue turns flat or slightly negative.

It could be that a single investment manager created that misleading story for the purpose of banging the share price down so he could get shares cheaper. It could be that no other fund manager would complain about foul play (of purposeful misleading reporting), as it is more to their advantage to react by simply buying more Disney shares for themselves. So the only investor who suffers is Joe Blow, who accepts it all in blind faith and believes that Disney has been financially damaged and that it could be a downward-spiraling process.