Whistleblower Says Disney Overstated Revenue
Given the worries about Disney’s Q3 earnings report, the admitted shortfall of both the theme parks and Fox acquisition, and — heck — even Spider-Man’s departure from the MCU, folks could forgive investors for the side-eye they’re giving The Mouse at the moment.
A former Walt Disney Co. accountant has accused the company of overstating revenue for years and has filed a series of whistleblower tips with the U.S. Securities and Exchange Commission.
Sandra Kuba, previously a senior financial analyst who worked for Disney for 18 years, said employees in the parks division systematically overstated revenue by billions of dollars, according to MarketWatch, which said it reviewed the filings.
In response to the report, Disney said the employee was fired for cause and “has persistently made patently false claims for over two years.”
Stock Was Down
The news was not what Disney stockholders wanted to hear:
The report rattled investors, who sent the shares lower after they’d been up as much as 1.8%. The stock was little changed at the close in New York.
Kuba’s filings said employees sometimes recorded sales twice for gift cards, when guests purchased a card and when they were used. Revenue was counted even when a card was given to a guest following a complaint, according to MarketWatch. Kuba’s filing alleges that flaws in the accounting software made the manipulation hard to trace.
She said 2008-09 revenue may have been overstated by up to $6 billion.
Disney Claps Back
The other side of the story is this: Disney says phooey.
In its statement, Disney said, “The claims she made to the company were thoroughly investigated and found to be utterly baseless. It is unfortunate that MarketWatch, which has been aware of the facts for months, knowingly and deliberately chose to give Ms. Kuba’s unfounded claims a platform.”
Judy Burns, an SEC spokeswoman, declined to comment.
Today, Disney stock was up .44% and 25.32 year-to-date, with its last price $135.72.
We’ll be following this story closely. Keep it here on MickeyBlog.com for updates.