Webtoon's 26% Plunge: Strategic Alliances or Earnings Abyss?

Summary
• Webtoon (WBTN) slumps 26.1% intraday to $12.425, erasing 40% of its 52-week range.
• Q3 earnings reveal $11.1M net loss vs. $20M profit in 2024, with adjusted EBITDA collapsing to $5.1M.
• Partnerships with Disney and Warner Bros. announced, but global MAU declines 8.5% amid Wattpad issues.

Webtoon’s stock is in freefall after a Q3 earnings report that exposed widening losses and declining user metrics, despite high-profile collaborations. The $12.425 price trades 26% below its 14:47 ET open, with technical indicators flashing bearish signals. Investors are now weighing whether the strategic alliances can offset deteriorating fundamentals.
Earnings Dismay Overshadows Strategic Alliances
Webtoon’s 26% intraday collapse stems from a Q3 earnings report that exposed structural weaknesses. While the company announced partnerships with Disney and Warner Bros., the financials told a different story: a $11.1M net loss (vs. $20M profit in 2024), 8.9% advertising revenue decline, and 8.5% global MAU drop. The market discounted the long-term potential of Disney’s digital comics platform and Warner’s animation deals, focusing instead on near-term risks like IP adaptation timing delays and Wattpad’s regulatory challenges in two countries. The 12% growth in English web comic MAU failed to offset the broader revenue contraction, triggering a liquidity-driven selloff.

Internet Content Sector Volatility Amid Tech Turbulence
Options Playbook: Capitalizing on WBTN’s Volatility
• MACD: -0.256 (bearish divergence), RSI: 40.04 (oversold), 200D MA: $11.84 (below price)
• Bollinger Bands: Price at $12.425 vs. lower band $16.33 (deep oversold)
• K-line Pattern: Short-term bearish trend with long-term bullish divergence

Top Options Contracts:
• WBTN20251121P12.5 (Put):
- Strike: $12.5, Expiry: 2025-11-21, IV: 94.14%, Delta: -0.499, Theta: -0.0089, Gamma: 0.218, Turnover: $1,428
- IV: High volatility, Delta: Strong bearish bias, Gamma: High sensitivity to price swings
- Payoff at 5% downside ($11.80): $0.225/share. This put offers 180% leverage and is ideal for short-term bearish bets.
• WBTN20251121C12.5 (Call):
- Strike: $12.5, Expiry: 2025-11-21, IV: 120.30%, Delta: 0.515, Theta: -0.0766, Gamma: 0.171, Turnover: $247
- IV: Extreme volatility, Delta: Moderate bullish bias, Theta: Aggressive time decay
- Payoff at 5% downside: $0. This call is a high-risk, high-reward play for a rebound above $12.5.

Trading Setup: Key support at $12.29 (intraday low) and resistance at $13.30 (intraday high). Short-term bearish momentum suggests a test of the 200D MA at $11.84. Aggressive bulls may consider WBTN20251121C12.5 into a bounce above $12.5, while bears should target WBTN20251121P12.5 if the $12.29 level breaks.

Backtest Webtoon Stock Performance
Below is an interactive back-test report that visualises the “-26 % Intraday Plunge-Follow” strategy on Webtoon (ticker: WBTN) from Jan-2022 to 13-Nov-2025.(just scroll the module to explore the details)Key Findings (concise):• Trades triggered by -26 % intraday crashes were rare but collectively unprofitable: total return –21.4 %, annualised –15.3 %. • Risk-adjusted performance was poor (Sharpe ≈ –0.72) and worst peak-to-valley drawdown hit 30.7 %. • Even with a 20 % take-profit, none of the trades reached that level; the average loss per trade was –10.7 %. • The strategy under-performed a passive hold of WBTN over the same horizon.Parameter notes:1. Stop-loss 12 % & take-profit 20 % were adopted as reasonable short-term swing thresholds (user didn’t specify). 2. Max hold 20 days keeps capital turnover high and limits prolonged exposure to post-crash drift.Feel free to adjust stop-loss / take-profit levels, remove the time stop, or test other plunge thresholds if you’d like to explore alternatives.

Act Now: Webtoon's Crossroads – Strategic Alliances or Earnings Abyss?
Webtoon’s 26% plunge reflects a market prioritizing near-term financial health over long-term strategic bets. While partnerships with Disney and Warner Bros. offer growth catalysts, the stock’s technicals and earnings trajectory suggest continued volatility. Investors should monitor the $12.29 support level and the $13.30 resistance. The sector leader, Alphabet (GOOGL), is down 3%, signaling broader tech sector jitters. Action: Short-term traders should target WBTN20251121P12.5 for bearish exposure, while long-term bulls may wait for a rebound above $12.5 before re-entering.