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Wall Street isn’t reacting well to DreamWorks Animation’s corporate reorganization and plans to release two films a year.

Shares of the toon studio fell 12.3% in after-hours trading Thursday, on DWA chief Jeffrey Katzenberg’s decision to lay off 500 employees, including head of marketing Dawn Taubin and COO Mark Zoradi, and shutter its PDI/DreamWorks facility in northern California.

DWA stock hit a 52-week low during after-hours trading of $18.51, but rebounded to open at $19.21 on Friday, a cent shy of an actual low in July, when it closed at $19.20. The stock closed at $21.31 on Thursday.

The stock continued to regain a bit on Friday, with shares off 8% to trade at $19.71 by noon EST.

Analysts were especially negative, if not cautious, on the plans, with Janney Capital Markets downgrading DWA’s stock from neutral to a sell rating. BTIG Research already had a sell rating on the company, while Sterne Agee said the studio was “more likely than not” to lose money because there is still a declining revenue opportunity from each film DWA will release.

At the same time, B. Riley said that the restructuring was the right move but that it would be at least 12 to 18 months before any positive results would be seen on DWA’s balance sheet. The firm has a neutral rating on DWA.

And Cowen and Co. reduced the stock to underperform, with Doug Creutz saying “while this may be the best choice given the circumstances, we do not believe the changes are likely to arrest the decline in DWA’s fundamentals.”

“With $500 million in debt and $50 million in cash on the balance sheet, upcoming restructuring cash costs of $110 million, and ‘Home’ slated as the only film in 2015 (March 27), we think DWA is in a precarious financial position.”

Janney’s Tony Wible said DWA’s situation undermines growth for two years and will start to spark liquidity concerns that hurt equity value.” It was downgrading the stock “as we see higher risk and little growth from film until 2017.”

DWA’s financial balance sheet could still make the company attractive to potential buyers, however.

“DWA is still an attractive M&A candidate for a foreign buyer,” Wible wrote.

“Investors keep hoping someone will buy the company or that they get that elusive blockbuster franchise that never comes,” said BTIG analyst Rich Greenfield. “Now, after frantically trying to sell themselves for north of $30 per share and everyone passing (because they understood just how overvalued DWA was), the company was left with no choice but to drastically reduce its cost structure to stay afloat.”