By Dean Seal

Shares of Webtoon Entertainment are making a major comeback from a tough first year on the market after Disney said it would bring its iconic comic properties to the Webtoon platform.

The stock was up 81%, at $16.97, Wednesday afternoon, on track for its highest single-day gain.

The online-comics company, launched in 2004 by South Korean internet giant Naver, went public in June 2024 with an initial offering that priced shares at $21. The stock sank the following August after quarterly revenue missed targets, and went on to tumble to a low of about $7 in April.

After its shares closed Tuesday at $9.36, Webtoon said it reached a deal with Disney to bring the entertainment conglomerate's properties, such as Marvel and Star Wars, to the Webtoon app's mobile vertical-scroll format.

The team-up includes a catalog of reformatted comics as well as new, original webcomic series that are in development. The arrangement is a coup for Webtoon, Raymond James analysts said in a research note.

"The stamp of approval from Disney, who is typically very selective about the distribution of its IP, demonstrates the value of the Webtoon platform and the ties to its otherwise hard-to-reach audience," the analysts said.

The Disney deal should help Webtoon attract English-speaking audience content from established partners, which would complement Webtoon's deep trove of creator-generated stories, the analysts said. It also opens the door for Webtoon to engage with other intellectual-property owners over time, they said.

"Having Disney lend its imprimatur to Webtoon raises the possibility of other major IP holders looking to Webtoon to access a unique customer segment that is hard to reach through traditional media channels," the Raymond James analysts said.

The deal also marks one of Disney's biggest publishing partnerships, JPMorgan analysts said in a research note. Webtoon now has about 155 million monthly active users across its business. It has previously partnered with the likes of Warner Bros. Discovery's DC Comics; Archie Comics; and anime-streaming service Crunchyroll, a unit of Sony Group.

Webtoon separately reported Tuesday that it recorded $348.3 million in revenue during the second quarter, up 8.5% from a year earlier and topping the $340.6 million analysts were expecting, according to FactSet.

The company's quarterly loss narrowed to $3.9 million, or 3 cents per share, from $76.6 million, or 70 cents per share, a year earlier, when IPO costs drove up its overhead.

Webtoon said it expects $380 million to $390 million in revenue in the current quarter, ahead of previous Wall Street targets.

Write to Dean Seal at dean.seal@wsj.com

(END) Dow Jones Newswires

August 13, 2025 14:38 ET (18:38 GMT)

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