Why Did Webtoon Entertainment’s Stock Soar 60% In After-Hours Trading?

Webtoon Entertainment shares jumped by nearly 60% in after-hours trading on Monday, following the company's announcement of a deal with Walt Disney to develop and operate an online platform for the media giant's extensive library of over 35,000 comics.

As part of the deal, Disney will acquire a 2% equity interest in Webtoon, though the companies have yet to reach a definitive agreement.

The partnership will see the creation of a new digital platform that will host decades of comics from Disney's franchises, such as "Marvel" and "Star Wars," and titles from 20th Century Studios.

Monday's announcement is an expansion of an agreement both sides signed last month, where Disney agreed to put nearly 100 classic comics and new online series on Webtoon's online-comic platform. At the time, Webtoon's shares jumped over 80% in a single day.

"Through our expanded relationship with Webtoon, the global leader in digital comics, we're opening doors to new audiences and deepening fan engagement," Disney Experiences Chairman Josh D'Amaro said in a statement.

Webtoon, which is controlled by South Korean internet giant Naver, listed on the Nasdaq in June 2024 and currently has a market cap of about $2 billion. The platform, also available as a mobile app, allows users to read, create, publish, and share graphic stories, and has licensing deals with publishers for web novels and merchandise.

On Stocktwits, the retail sentiment for Webtoon shifted to 'extremely bullish' from 'bearish' the previous day, with several users noticing the stock spike and putting it on their watch list. Retail trader sentiment for Disney stock was ‘neutral.’

As of the last close, WBTN stock is up 10.2% this year.

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