DIS - Disney

[Gregmal]

Maybe we can get a team of us COBF real estate dudes together and do a "whats Disneys real estate worth" report!

 

I think this one was obviously a little euphoric a few months back but its got some irreplaceable assets and content. I'll probably look/hope to start buying in the $11x range and below. Which by my count should maybe next Monday or Tuesday. At the current rate we just need like 6 more days of people getting the coronavirus and short term market folks will drive this to the $90s. Maybe if US cases reach 1,000, this and like half the market will be in single digits!

[woltac]

Anyone want to guess what Disney will be selling for after they shut down the US theme parks?

[bergman104]

Anyone want to guess what Disney will be selling for after they shut down the US theme parks?

 

I'm hoping much lower. I'm already interested at this price. Seems like the general theme has been to cancel school, colleges, and gatherings for the next 2-3 weeks. I imagine we'd see a much lower price if that happens

[glorysk87]

Anyone want to guess what Disney will be selling for after they shut down the US theme parks?

 

Don't think it goes a whole lot lower. Shutdown of the parks was already mostly priced in.

[CorpRaider]

They announced the closures.  Postponing Mulan release, current pixar film has to be tanked...espn has no sports to show for who knows how long...cruise lines and hotels are going to be empty and moody's put them on credit watch negative.

[Castanza]

They announced the closures.  Postponing Mulan release, current pixar film has to be tanked...espn has no sports to show for who knows how long...cruise lines and hotels are going to be empty and moody's put them on credit watch negative.

 

3 new cruise ships in the pipe for 2021, 22, 23 too, that's got to be expensive. They don't break down revenue for their cruise line their 10k. It's all lumped together under Parks and Resorts which is (going from memory) 25ish% rev?

[mwtorock]

the princesses and the mouse will live on, probably longer than any of us. and the revenue lost in this quarter might just be captured later this year.

[Castanza]

Absolutely

 

It was more of a near term comment that will probably add to the downward pressure.

[CorpRaider]

I don't see how they recapture the lost revenue from cancelled cruises and shut down parks and postponed movie showings, and cancelled sporting events/seasons especially in the same year.  Also, we have a brand new CEO here.  He would be most unusual if he didn't use this opportunity to clear the decks/reset expectations, especially following Iger.  The financials were already likely to look like crap for a while as they invest/transition from a fantastic linear tv model to direct to consumer.

[DooDiligence]

www.latimes.com/entertainment-arts/business/story/2020-03-11/disney-annual-shareholder-meeting

[Xerxes]

Question for you guys.

 

I own DIS for about 5 years and have been enjoy Iger' last chapter with the stock nearing $150. Right now, I had lost about a third of the position, i usually don't have a problem in holding long term positions through thick and thin, it is just that in Disney's case, every business that they are in, there seem to have be heavily impacted by the pandemic .... and social distancing will aggravate its situation.

 

People point to Disney+, yes it has now 50 million subs, but that is money-losing machine on the front-end of the investment cycle. So right now, DIS is akin to a money-losing Netflix with the additional headaches of fixed cost of its theme parks + cruise ships + ESPN passing through the income statement and hitting the bottom line.

 

Add to it the $50 billion debt that Disney has (mostly due to 20th Cent Fox). 

 

Is there a bull case here for me to add if it does go down to $90 after earning.

 

[glorysk87]

Question for you guys.

 

I own DIS for about 5 years and have been enjoy Iger' last chapter with the stock nearing $150. Right now, I had lost about a third of the position, i usually don't have a problem in holding long term positions through thick and thin, it is just that in Disney's case, every business that they are in, there seem to have be heavily impacted by the pandemic .... and social distancing will aggravate its situation.

 

People point to Disney+, yes it has now 50 million subs, but that is money-losing machine on the front-end of the investment cycle. So right now, DIS is akin to a money-losing Netflix with the additional headaches of fixed cost of its theme parks + cruise ships + ESPN passing through the income statement and hitting the bottom line.

 

Add to it the $50 billion debt that Disney has (mostly due to 20th Cent Fox). 

 

Is there a bull case here for me to add if it does go down to $90 after earning.

 

The only question that matters here is "what is your timeframe"?

[DooDiligence]

Question for you guys.

 

I own DIS for about 5 years and have been enjoy Iger' last chapter with the stock nearing $150. Right now, I had lost about a third of the position, i usually don't have a problem in holding long term positions through thick and thin, it is just that in Disney's case, every business that they are in, there seem to have be heavily impacted by the pandemic .... and social distancing will aggravate its situation.

 

People point to Disney+, yes it has now 50 million subs, but that is money-losing machine on the front-end of the investment cycle. So right now, DIS is akin to a money-losing Netflix with the additional headaches of fixed cost of its theme parks + cruise ships + ESPN passing through the income statement and hitting the bottom line.

 

Add to it the $50 billion debt that Disney has (mostly due to 20th Cent Fox). 

 

Is there a bull case here for me to add if it does go down to $90 after earning.

 

The only question that matters here is "what is your timeframe"?

 

I agree, my time frame is 10+ years on DIS.

 

I had an average cost of $100.77 & had trimmed around 25% last year at $141. 07 & then repurchased at exactly $80 the same number of shares that I'd previously sold & if it goes to $80 again I'll add more.

[plato1976]

If the time frame is 10 years you may not want to trade it

 

Question for you guys.

 

I own DIS for about 5 years and have been enjoy Iger' last chapter with the stock nearing $150. Right now, I had lost about a third of the position, i usually don't have a problem in holding long term positions through thick and thin, it is just that in Disney's case, every business that they are in, there seem to have be heavily impacted by the pandemic .... and social distancing will aggravate its situation.

 

People point to Disney+, yes it has now 50 million subs, but that is money-losing machine on the front-end of the investment cycle. So right now, DIS is akin to a money-losing Netflix with the additional headaches of fixed cost of its theme parks + cruise ships + ESPN passing through the income statement and hitting the bottom line.

 

Add to it the $50 billion debt that Disney has (mostly due to 20th Cent Fox). 

 

Is there a bull case here for me to add if it does go down to $90 after earning.

 

The only question that matters here is "what is your timeframe"?

 

I agree, my time frame is 10+ years on DIS.

 

I had an average cost of $100.77 & had trimmed around 25% last year at $141. 07 & then repurchased at exactly $80 the same number of shares that I'd previously sold & if it goes to $80 again I'll add more.

[DanielGMask]

Question for you guys.

 

I own DIS for about 5 years and have been enjoy Iger' last chapter with the stock nearing $150. Right now, I had lost about a third of the position, i usually don't have a problem in holding long term positions through thick and thin, it is just that in Disney's case, every business that they are in, there seem to have be heavily impacted by the pandemic .... and social distancing will aggravate its situation.

 

People point to Disney+, yes it has now 50 million subs, but that is money-losing machine on the front-end of the investment cycle. So right now, DIS is akin to a money-losing Netflix with the additional headaches of fixed cost of its theme parks + cruise ships + ESPN passing through the income statement and hitting the bottom line.

 

Add to it the $50 billion debt that Disney has (mostly due to 20th Cent Fox). 

 

Is there a bull case here for me to add if it does go down to $90 after earning.

 

The only question that matters here is "what is your timeframe"?

 

I agree, my time frame is 10+ years on DIS.

 

I had an average cost of $100.77 & had trimmed around 25% last year at $141. 07 & then repurchased at exactly $80 the same number of shares that I'd previously sold & if it goes to $80 again I'll add more.

 

If the time frame is 10 years you may not want to trade it

 

I agree.

[Gregmal]

Not really investment related, but the upcoming Jordan series sounds like it's going to be huge. Pretty incredible story behind all of it, and in the world we live in, hard to imagine how in the world this sat unseen for more than two decades.

[Guest roark33]

It sat unseen because Jordan didn't want it to be seen....yet. 

 

He finally gave permission this year.  He had ultimate veto power and always said no over the years.

 

Here's the story behind releasing it now:

 

https://www.espn.com/nba/story/_/id/29044827/an-all-access-michael-jordan-documentary-how-last-dance-was-made-possible

[Agrippa07]

Disney stops paying 100,000 workers to save $500m a month

https://giftarticle.ft.com/giftarticle/actions/redeem/3afc3fd5-7a03-4f54-9521-fe07c1330b4b

 

The decision leaves Disney staff reliant on state benefits — public support that could run to hundreds of millions of dollars over coming months — even as the company protects executive bonus schemes and a $1.5bn dividend payment due in July.

 

As a shareholder in Dis, I find this is appalling. The executives should be forgoing their base &variable pay 1st, followed by shareholders and lastly the employees.

 

 

 

 

[gfp]

Great article - thanks for posting.  I grew up in Chicago in the 80's and 90's - what a time

 

It sat unseen because Jordan didn't want it to be seen....yet. 

 

He finally gave permission this year.  He had ultimate veto power and always said no over the years.

 

Here's the story behind releasing it now:

 

https://www.espn.com/nba/story/_/id/29044827/an-all-access-michael-jordan-documentary-how-last-dance-was-made-possible

[DooDiligence]

Disney stops paying 100,000 workers to save $500m a month

https://giftarticle.ft.com/giftarticle/actions/redeem/3afc3fd5-7a03-4f54-9521-fe07c1330b4b

 

The decision leaves Disney staff reliant on state benefits — public support that could run to hundreds of millions of dollars over coming months — even as the company protects executive bonus schemes and a $1.5bn dividend payment due in July.

 

As a shareholder in Dis, I find this is appalling. The executives should be forgoing their base &variable pay 1st, followed by shareholders and lastly the employees.

 

Disney Execs Are Unhappy About Slashed Salaries

 

"A standard Disney vp earns between $150,000 and $200,000 in annual base pay while an executive vp can earn upwards of $700,000 per year depending on their department, according to The Hollywood Reporter. Under this new effort, earnings are being reduced to weather the financial storm. However, the amended contracts presented to the affected executives reportedly do not include an end date, which is eliciting backlash from the higher ranks."

 

"Chairman and former CEO Bob Iger has already announced that he will forgo his entire salary. New CEO Bob Chapek will reduce his base salary by 50 percent. However, the outlet notes that this only applies to their base salaries. Iger’s on-paper take home last year was “just” $3 million but he earned $44.5 million in total compensation (and was on pace for potentially more than $400 million over the next four years) while Chapek carries an annual target bonus of $7.5 million and a long-term deal worth upwards of $15 million. Some are flummoxed by this arrangement particularly as they contemplate an extended economic downturn."

 

https://observer.com/2020/04/bob-iger-bob-chapek-salary-disney-execs-pay-cuts-coronavirus/

 

---

 

Not a particularly good look for them.

 

I sent a msg to investor relations re: Iger & Chapek's bonuses.

 

Who knows, my email to MO may have been the one that tipped Howard Willard into resignation.

Maybe this msg will prompt Iger & Chapek to forgo their bonuses?  ???

[mwtorock]

Way to go!!

 

*******************************************************************************

I sent a msg to investor relations re: Iger & Chapek's bonuses.

 

Who knows, my email to MO may have been the one that tipped Howard Willard into resignation.

Maybe this msg will prompt Iger & Chapek to forgo their bonuses?  ???

[Xerxes]

Thanks folks for the feedback.

Timeframe is 10 year +, I have been holding flat for 4 years by itself before the re-rating of last spring, what is another 10 years  :-)

 

I am hesitant to add unless it drops big post earing, just because, I would categorize DIS as net-net headwinds in the short-term. Said differently, down for a reason and I will have more opportunities to buy again. Too much headwinds.

 

I am guessing the bargain for names that have net-net tailwinds in the short-term are already gone. My focus in March, throughout the liquidity air pocket crash, was to make Berkshire my second largest holding from a minor position, … i accomplished that, and have dollar set aside for add-ons. But I didn't really had a chance to focus on adding up on other positions.

 

The BAM family is my largest I believe, BRK is my second largest, followed by Amazon as a close third.

I think FFH family is my fourth largest.

 

The market may very well roll over in the next 6 months again, as the recession takes hold, but with a lower VIX, so no opportunities to get bargain due to forced selling, …. unless there is something very drastic that would re-ignite hurricane forces (very high VIX) that would create another massive liquidity crunch, whereby names with tailwinds and headwinds would all go down. 

 

[fareastwarriors]

Cut the dividend for first half. Probably wise to preserve cash.

 

The company had 33.5 million Disney+ subscribers as of March 28.

Disney reported that Hulu has 32.1 million total subscribers, up 27% from last year. ESPN+ also grew to 7.9 million subscribers. 

 

 

The Walt Disney Company today reported earnings for its second fiscal quarter ended March 28, 2020. Diluted earnings per share (EPS) from continuing operations for the quarter decreased 93% to $0.26 from $3.53 in the prior-year quarter. Excluding certain items affecting comparability(1), diluted EPS for the quarter decreased 63% to $0.60 from $1.61 in the prior-year quarter.

 

EPS from continuing operations for the six months ended March 28, 2020 decreased 73% to $1.44 from $5.42 in the prior-year period. Excluding certain items affecting comparability (1), EPS for the six months decreased 38% to $2.14 from $3.45 in the prior-year period. Results in the quarter and six months ended March 28, 2020 were adversely impacted by the novel coronavirus (“COVID-19”) pandemic.

 

 

https://thewaltdisneycompany.com/app/uploads/2020/05/q2-fy20-earnings.pdf

[DooDiligence]

For all my talk about holding for the next decade, I got the jitters & sold all but a tiny bit on 30 April for $110.80 and if it plunges down to $80 again I'll start repurchasing.

[mwtorock]

NFLX is constantly trading at $1000 per subscriber, and they do not have a huge IP portfolio, parks, licensing, etc. Of cause DIS would not selling at 100 if no pandemic, but dtc business is growing faster than usual too. In a two to three years horizon, with a normalized environment, it is reasonable to expect DISNEY+ to get over 100m subs globally and other businesses generate tons of cash again. Obviously there are other opportunities out there in this market. We all just need to pick and choose.