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Pixie_Dust
09-10-2002, 09:15 AM
If Eisner is ousted, would the price of Disney stock likely rise? Has anyone bought stock now with that idea in mind?

Cheers :)

KNWVIKING
09-10-2002, 09:41 AM
It could also drop. I wouldn't buy stock based on ME's employment. Disney is a solid long term investment stock. IMO, if ABC even shows modest improvement this season the stock should climb a few bucks.

DVCDAVE
09-10-2002, 01:06 PM
Disney is a solid long term investment stock. IMO,


WOW !!! You must know something Standard and Poor's, Fitch, and Moody's don't know. They have downgraded Disney's credit rating twice in less than 12 months, AND continue to maintain it on their creditwatch list with negative implications, citing weakness in their core businesses. the bonds are 2 small baby steps above junk status.

Im just citing the facts, not making an opinion,

js
09-10-2002, 01:43 PM
knwviking, I must agree with DVCdave. I just cashed in the kids Disney stock and took whatever money was left :) and added to their annuity funds. Just wish I got around to it sooner.

KNWVIKING
09-10-2002, 02:45 PM
... Lets bookmark this thread & revisit it in 5 years.

DVCDAVE
09-10-2002, 02:59 PM
Fine, lets also look at the last five years too. But I don't want this to turn in to a useless debate. All I pointed out is the company has already financially slid substainally. Two downgrades in lesss than 12 months, that is some acheivment for a multi-billion dollar operation, which was virtually debit free when Eisner took control.

The downgrades in their credit rating aren't badges of honor that Eisner is parading in front of the press as personal acheivments.

manning
09-10-2002, 03:24 PM
Js, if you didn't need the money for a long time, it may have been better to hold. It's going to take a while and personnel changes to turn things around. Of course, you have to do what is more comfortable for you.

As far as the stock going up if Eisner is booted may depend on what shape the company is in when (if) he leaves. Who knows.

KNWVIKING
09-10-2002, 03:29 PM
Dave, I'm not disputing the recent history, but I believe Disney has several cash cows it can rely on. Disney is also in the process of repurchasing its stock. Would they rather do that at $14.00 or $44.00 per share. I view certain companies almost as icons. If Disney goes under, then this country has more important issues to deal with then theme parks.

manning
09-10-2002, 03:49 PM
Why is Disney repurchasing stock when they have a huge debt? Are they doing this to prop up the stock price?

I have stock in a company that is buying back stock, but they have more money than they know what to do with it. And no debt.

KNWVIKING
09-10-2002, 03:56 PM
.... I don't know the reason behind the buy back,just know from what I've read that they are doing it.

Bstanley
09-10-2002, 04:29 PM
First - The ratings you mention have nothing to do with the stock price. They are bond ratings. They are meant to give a relative measure of the ability of the company to pay back the money it borrowed to the bond holders - In the time frame - AND - In the manner that it committed to when it sold the bond.

Bonds with better ratings than Disney's have been defaulted on and bonds with a lower rating than Disney's have been paid without problem. Further - bonds are renegotiated all the time - in fact Disney renegotiated hundreds of millions worth during the EuroDisney mess.

Second - I don't imagine that The Big ME is particularly proud of the stock price decling for the last 6 years or so, but let's not get carried away.

In 1983 'Disney' had about $450M in debt and had tangible assets of about $2.4B, today it has about $15B in debt and has tangible assets of about $30B.

Disney Corp has some distance to go before it folds up it's tent.

Finally - will the stock price go up when The Big ME 'retires'?

It should :-)

But nobody will know until it happens. And IMHO the state of the company at that point will be more relevant than the change of CEO. Will the Pooh lawsuit explode in Disney's face? Will ABC hit it big with a couple of hit shows? etc. etc.

raidermatt
09-10-2002, 04:49 PM
Its not that Disney is a BAD investment. Its just that there might be some BETTER options out there... Companies who already have a management team that understands what drives its business...

raidermatt
09-10-2002, 04:54 PM
Oh, and to answer the original question...

My OPINION is that a ME ouster would probably result in an immediate drop in the stock price.

The Street HATES uncertainty.

Of course, how quickly the new team is put in place, and who makes up that team would have an impact as well in the short term.

But if it were announced today that ME were stepping down, I seriously doubt that in and of itself, it would have a positive effect on the stock price.

DVCDAVE
09-10-2002, 05:42 PM
KNWVIKING; but I believe Disney has several cash cows it can rely on.

Don't you think S&P, Fitch, and Moody's took the cash cows in to account too? I think they are smart enough to, after all they are in the businees to look at ALL aspects of debit repayment.

Disney is also in the process of repurchasing its stock

Not exactly correct. It was Eisner and another insider that bought the stock NOT Disney. But that is understandable as he is entering the fight for his job, the only entity that has more stock than Eisner now is Shamrock Holdings. He is basicaly buying the VOTES he needs to maintain his job.


BSTANLEY;
Bonds with better ratings than Disney's have been defaulted on and bonds with a lower rating than Disney's have been paid without problem

Sounds like a lot of double talk, if they defaulted, then how did they pay??? What am I missing here ??? Name 1 company that Had a higher rating than Disney's and defaulted ?? I smell baloney.

Further - bonds are renegotiated all the time - in fact Disney renegotiated hundreds of millions worth during the EuroDisney mess.

Fact: It was in BANKRUPTCY COURT that they renegotiated those bonds !!!!! LOL !! If bonds are so quickly renegotiated on whims like you state, then why contradict your earlier statement (which I happen to agree with),

In the time frame - AND - In the manner that it committed to when it sold the bond.

Do you know what a prospectus is ? Do you know what it means ?...Obviously not.

And if this quote is true, First - The ratings you mention have nothing to do with the stock price

So much for debit/equity, and liquidity ratios, and cash flow analysis......Give me the name of one company that has a D credit rating trading over $20 per share ?? Answer; There is none, why ? because stocks that go up in value, stay out of bankruptcy court by paying off their obligations. (However, staying out of bankruptcy court does not mean a stock goes up in value.)

KNWVIKING
09-10-2002, 07:25 PM
...I'm not talking about ME buying 10M in stock. I talking about Disney actively repurchasing it's stock.This is fact,not rumor.


"CHAMPAIGN, Ill. _ It has become almost a truism on Wall Street that stock repurchases by a company increase the value of the firm. From Intel Corp. to Walt Disney, so many companies have bought back shares of their own stock in the last 15 years that "a major realignment of corporate financial policy" has taken place in America, says James A. Gentry, a finance professor at the University of Illinois."

manning
09-10-2002, 07:30 PM
IMHO, both parties will need outside help to accomplish their goal (boot Eisner or Eisner to keep his job. The number of shares both parties own is a drop in the bucket compared to what institutions hold. Whoevers wins over the institutions wins the battle.

Also any individual voting stockholders may help too.

manning
09-10-2002, 07:38 PM
IMHO, both parties will need outside help to accomplish their goal (boot Eisner or Eisner to keep his job. The number of shares both parties own is a drop in the bucket compared to what institutions hold. Whoevers wins over the institutions wins the battle.

Also any individual voting stockholders may help too.

manning
09-10-2002, 07:39 PM
IMHO, both parties will need outside help to accomplish their goal (boot Eisner or Eisner to keep his job). The number of shares both parties own is a drop in the bucket compared to what institutions hold. Whoevers wins over the institutions wins the battle.

Also any individual voting stockholders may help too.

manning
09-10-2002, 07:44 PM
IMHO, both parties will need outside help to accomplish their goal (boot Eisner or Eisner to keep his job). The number of shares both parties own is a drop in the bucket compared to what institutions hold. Whoevers wins over the institutions wins the battle.

Also any individual voting stockholders may help too.

manning
09-10-2002, 08:51 PM
Boy, did this computer get into a loop. There was only to be one post!!! Sorry, I wasn't trying to make a point!!

DVC-Landbaron
09-10-2002, 09:01 PM
Hey manning!!

You can say that again!! ;)

King Triton
09-10-2002, 10:17 PM
Disney stock will go great. I just bought more Disney stock today.

King Triton

Pixie_Dust
09-11-2002, 10:35 AM
Originally posted by Bstanley
Will the Pooh lawsuit explode in Disney's face?

What is the Pooh lawsuit?

Cheers :)

js
09-11-2002, 11:30 AM
manning, no the kids didn't need the money right away but it will do much better in the fund than it will with Disney.
Oh well, good luck to all :)

Walt's Frozen Head
09-11-2002, 12:38 PM
Pixie_Dust...

Long story short, the Schlesingers (the family from whom Disney licenses the rights to use Pooh) feel that Disney has been purposely and chronically underpaying them for years. The courts have already agreed to a certain extent, and there was work being done to determine the amount Disney owed. While attempting to sort this out, Disney has been caught (more than once) shredding documents that the court had requested.

Because of some of the intricacies of California law, it appears that revoking the license _is_ a possible remedy in this case.

So there's no doubt that Disney owes the Schlesingers some amount of money (I think there have been partial payments on that amount), and no doubt that they've honked off the legal powers-that-be. This _will_ cost Disney a chunk of change, and could yet cost them the Pooh license.

-WFH