Any Opinions On...

[Faldred]

Current SEC documents show Apple having between 25B and 40B in cash on hand (depending on the filing you look at).

That's not even 50% (or just barely, in terms of top end) of the stock valuation of Disney, right now. And it would completely wipe out Apple's cash on hand (which they're not going to do, because it would have huge impact on their per share price).

That's odd, I saw a report not long ago that said that they had over $50B in cash, and were adding to it. That was when I first saw the idea posited that Apple could/should buy Disney, which I at first thought was ridiculous, but then reconsidered due to the media empire side of it.

 

[pilferk]

That's odd, I saw a report not long ago that said that they had over $50B in cash, and were adding to it. That was when I first saw the idea posited that Apple could/should buy Disney, which I at first thought was ridiculous, but then reconsidered due to the media empire side of it.

Nope....unless they've doubled their cash since Dec '10.

http://ycharts.com/companies/AAPL/cash_on_hand

http://finance.yahoo.com/q/ks?s=AAPL

The highest estimate I can find in 2010 is about 38B in cash on hand..but I don't see much in the way of corroboration in terms of ycharts or SEC filings. Just a couple random reports to that effect.

I've seen the "over 50 billion warchest" articles too...but they don't seem to have any basis in fact.

Edit: Maybe those articles are defining "cash" differently than I would (cash has to be liquid or near liquid...like a money market account or checks held...not securities (short or long term)). They might be able to RAISE 50 billion, relatively quickly...but that would take pretty much every penny of liquid assets they have, as well as strain their other resources, to the point of almost breaking (or they'd add debt). To get control of Disney, they'd basically have a cash balance (literally, on their balance sheet) of zero AND probably clear out some of the less liquid instruments they're holding (like investments).

Edit 2: Found the discrepancy:

http://blogs.barrons.com/techtrader...estimates-16m-iphones-7m-ipads-shares-halted/

Apple generated $9.8 billion in cash from operations in the quarter, and the total of cash & equivalents, and short- and long-term marketable securities was $59.6 billion at the quarter’s end.

To get to that 50+ billion, you'd have to divest of all your equivalents AND your short and long term securities. That's quite a hit to take off the balance sheet.

 

[Faldred]

Edit: Maybe those articles are defining "cash" differently than I would (cash has to be liquid or near liquid...like a money market account or checks held...not securities (short or long term)). They might be able to RAISE 50 billion, relatively quickly...but that would take pretty much every penny of liquid assets they have, as well as strain their other resources, to the point of almost breaking (or they'd add debt). To get control of Disney, they'd basically have a cash balance (literally, on their balance sheet) of zero AND probably clear out some of the less liquid instruments they're holding (like investments).

Edit 2: Found the discrepancy:

To get to that 50+ billion, you'd have to divest of all your equivalents AND your short and long term securities. That's quite a hit to take off the balance sheet.

Yeah, that makes more sense. If it was $50+ billion is cash and cash equivalents, then it might make sense. If they have to pull every string they've got and strip themselves bare of all financial backup, then no, it doesn't make sense.

And I don't think they'd want to use stock, either.

 

[yitbos96bb]

OK. My memory may be failing me. Was Disney in big trouble when Comcast came knocking? Because I know that deal was very close to being accepted.

Memory definitely failed on this one. Comcast's bid was unsolicited and was not even remotely close to be being accepted. It never got past an initial board vote which was a 100% no by the board. The board was willing to listen to a higher bid, but did not get one.


Comcast obviously realized that cable TV is going to be a dying trend over the next 20-30 years, but content is and always will be king... so go after Disney, ESPN, etc. That failed so they bought out NBC instead.

http://www.usatoday.com/money/media/2004-02-16-disney-rejects_x.htm

 

[jimmytammy]

IMO, not going to happen. No one person has has anything to gain from it. It will take a slew of higher ups to get it done, and Disney is doing to well in finances to sell. Hostile takeover would be only way it would happen and Disney wont allow that. Lets not even think that way! Just my opinion. Glass half full

 

[AnthonyJPreston]

.

 

[manning]

Current SEC documents show Apple having between 25B and 40B in cash on hand (depending on the filing you look at).

That's not even 50% (or just barely, in terms of top end) of the stock valuation of Disney, right now. And it would completely wipe out Apple's cash on hand (which they're not going to do, because it would have huge impact on their per share price).

For anyone to control a company all they need is only about 5% ownership of stocks. It all depends on how well organized they are, no one owns over 50% and all the other stocks are widely owned by others. Hard to do, but can be done.

Roy Disney was able to get Eisner out, but it took the help of retirement/mutual fund to do it. Not enough to vote him out, but enough to send him the message it was time to go.

 

[lockedoutlogic]

Maybe a couple of the 400 undividuals in the US that make as much as the lowest 50% of American workers combined (yeah....that's 110 million people if you're counting at home) would pool some cash and take them private.

My hope (sarcasm aside) is that at somepoint Disney would go back private in the care of those that will preserve or restore it.

And selling off abc and the travesty known as ESPN would be a good first move.

that's where i'm at

 

[Cobra B.]

I would think that after selling off the Disney Stores and the disaster that came with that they might have learned their lesson. It's bad enough that Disney On Ice is Feld Entertainment and it resembles a circus with Disney's name on it. Guess that's 'cause Feld probably does circuses too? But then again there are no Disneys left at Disney. Just don't sell off to a beverage company. Walt will turn over in his freezer.

 

[speedyf]

Very interesting thread...

I haven't seen anyone comment on the fact that the value of Disney could go down. I'm not an investing guru or anything like that, but I purchased some stock in Disney back in 2008 when it was around $16 per share.

If it can go from $16 to $43 in just the past 2+ years, it can certainly go back down that quickly (if not quicker).

In fact, I've read a few articles from a "doom and gloom" perspective that predicts that Disney may lose value because of two issues. ESPN is basically the "cash cow" of Disney with a good chunk of profit resulting from ad revenue from the network. Some think that if the NFL ends up with a lockout and the NBA could possibly end up with a lockout or strike that it could adversely affect Disney's profit from ESPN and send the stock price to lower territory.

So...just to fuel the speculation even more...what if Disney were to go down to say $20 to $25 a share because of a few sports lockouts and Apple added a record quarter because of new iPhone sales to Verizon customers?

Speed

 

[TisBit]

Very interesting thread...

I haven't seen anyone comment on the fact that the value of Disney could go down. I'm not an investing guru or anything like that, but I purchased some stock in Disney back in 2008 when it was around $16 per share.

If it can go from $16 to $43 in just the past 2+ years, it can certainly go back down that quickly (if not quicker).

In fact, I've read a few articles from a "doom and gloom" perspective that predicts that Disney may lose value because of two issues. ESPN is basically the "cash cow" of Disney with a good chunk of profit resulting from ad revenue from the network. Some think that if the NFL ends up with a lockout and the NBA could possibly end up with a lockout or strike that it could adversely affect Disney's profit from ESPN and send the stock price to lower territory.

So...just to fuel the speculation even more...what if Disney were to go down to say $20 to $25 a share because of a few sports lockouts and Apple added a record quarter because of new iPhone sales to Verizon customers?

Speed

I am not sure about the profitablility of ESPN, but Disney is a very large company and there is no one revenue source that will kill it....regardless of ESPN or the parks. Merchandising, movies, and the such will still be around to help float the company without major issues.

Also, lockouts don't shut down ESPN...there are lots of sports out there and the lockouts themselves are news, so ESPN will still be there covering them and retaining viewers. Especially the NFL, they have a short season and limited games on ESPN.

As for an Apple takeover of Disney, I hate to burst bubbles here, but Apple is not completely consumer friendly company. Apple has been known for making decisions for the consumer and not following the ebbs and flows of the market. Some of the biggest critics complain about the fact that Apple products/services are designed by Jobs and you are merely allowed to use them. Now, I love my Iphone and will probably be buying an Ipad, but the downside of that is if you put that into the Disney model....it is not "customer" oriented thinking. They will decide what you do and don't want and remove all other options.

 

[Disco]

As for an Apple takeover of Disney, I hate to burst bubbles here, but Apple is not completely consumer friendly company. Apple has been known for making decisions for the consumer and not following the ebbs and flows of the market. Some of the biggest critics complain about the fact that Apple products/services are designed by Jobs and you are merely allowed to use them. Now, I love my Iphone and will probably be buying an Ipad, but the downside of that is if you put that into the Disney model....it is not "customer" oriented thinking. They will decide what you do and don't want and remove all other options.

I agree, Apple is one of the worst companies I can imagine buying Disney. Walt would be rolling over in his grave.

 

[Faldred]

As for an Apple takeover of Disney, I hate to burst bubbles here, but Apple is not completely consumer friendly company. Apple has been known for making decisions for the consumer and not following the ebbs and flows of the market. Some of the biggest critics complain about the fact that Apple products/services are designed by Jobs and you are merely allowed to use them. Now, I love my Iphone and will probably be buying an Ipad, but the downside of that is if you put that into the Disney model....it is not "customer" oriented thinking. They will decide what you do and don't want and remove all other options.

Actually, I see it as the complete opposite, for the same reasons.

To me, the focus on end-user experience, to the point of somewhat excessive control over that experience, fits the Disney model quite well. It is customer-oriented even though it doesn't give the customer control, as it is focused on managing the customer's overall experience.

 

[Peter Pirate 2]

I am not sure about the profitablility of ESPN, but Disney is a very large company and there is no one revenue source that will kill it....regardless of ESPN or the parks. Merchandising, movies, and the such will still be around to help float the company without major issues.

Also, lockouts don't shut down ESPN...there are lots of sports out there and the lockouts themselves are news, so ESPN will still be there covering them and retaining viewers. Especially the NFL, they have a short season and limited games on ESPN.

As for an Apple takeover of Disney, I hate to burst bubbles here, but Apple is not completely consumer friendly company. Apple has been known for making decisions for the consumer and not following the ebbs and flows of the market. Some of the biggest critics complain about the fact that Apple products/services are designed by Jobs and you are merely allowed to use them. Now, I love my Iphone and will probably be buying an Ipad, but the downside of that is if you put that into the Disney model....it is not "customer" oriented thinking. They will decide what you do and don't want and remove all other options.

ESPN is a very profitable division and strikes, as are possible at this point, in the NFL and NBA would have major influence on their bottom line via lost sales revenues. More televised bowling will not stem the tide.

Regarding Apple, the key is Jobs, not Apple. His health is probably the biggest factor in anything he (they) would do BUT even though Apple itself hasn't always been consumer friendly the key word isn't Jobs or Apple, it's PIXAR. Jobs was practically Walt incarnate at the helm of one of the the most innovative and imaginative Companies of our time. Walt would rise out of the freezer and help reorganize the Company should Jobs takeover, IMO.

 

[Disco]

Very interesting thread...

I haven't seen anyone comment on the fact that the value of Disney could go down. I'm not an investing guru or anything like that, but I purchased some stock in Disney back in 2008 when it was around $16 per share.

If it can go from $16 to $43 in just the past 2+ years, it can certainly go back down that quickly (if not quicker).

In fact, I've read a few articles from a "doom and gloom" perspective that predicts that Disney may lose value because of two issues. ESPN is basically the "cash cow" of Disney with a good chunk of profit resulting from ad revenue from the network. Some think that if the NFL ends up with a lockout and the NBA could possibly end up with a lockout or strike that it could adversely affect Disney's profit from ESPN and send the stock price to lower territory.

So...just to fuel the speculation even more...what if Disney were to go down to say $20 to $25 a share because of a few sports lockouts and Apple added a record quarter because of new iPhone sales to Verizon customers?

Speed

Well the big discrepancy in stock price over the last two years was caused by a huge market crash. Generally when that happens the value of all companies are down (with a few exceptions of course).
Looking past that dip you see Disney has a pretty solid valuation in the 30's. Disney has a lot of assets that make it hard to devalue the stock too much. Not to mention they have added so much over the past 15 years, being 20 and under is hard to imagine. I’m sure it could or will happen but most people would understand that it would be a temporary dip and valuing the true worth of the company based on a temporary stock dip would be more than fickle.
While ESPN is a cash cow now it is still only a small part of the company, it just has less overhead than some of the other divisions. All the parks division would have to do is stop spending money on new ships and park improvements and they would make far more than ESPN. The nice thing about having so many different divisions is that they cover for each other and if they stop working, you dump them.

 

[speedyf]

I'm not saying that Disney would lose it's value down to $15 per share again. I realize it was that low because of the market (I think the Dow was in the 6,000's at the time).

I'm just saying that if the NFL and the NBA would strike/lockout, it could possibly hurt the stock price a bit and make a buyout a little more realistic. Maybe other factors would have to happen to hurt the stock a bit more...like $5 per gallon gas again (which is feasible).

Just using the numbers floated in this thread....if Disney has 1.9 Billion Shares outstanding, but the price per share were around $28 instead of $43, the overall "value" of the company falls from $82 Billion to around $53 Billion...making it closer to that reported $50 Billion warchest that Apple supposedly has.

Of course...Apple doesn't have to physically buy all 1.9 Billion Shares to take control and there are other factors at play...like the fact that if they just made an announcement that Apple was buying Disney the Disney stock price would probably rise just from the news.

Speed

 

[brocklesnar69]

I'd be curious to know exactly how much (dollar amount) it would cost to purchase Disney as a whole. I'm talking everything under the Disney name (EVERYTHING) every park, e-v-e-r-y-t-h-i-n-g?

Pixar by itself cost $4 Billion. I would guess Disney as a whole would be between $20-$30 Billion.

Is it possible to take companies that are Public and make them Private again?

 

[ChrisFL]

I agree, Apple is one of the worst companies I can imagine buying Disney. Walt would be rolling over in his grave.

If Walt actually rolled over in his grave as many times as people say this, he would have spun his way to China.

Thank goodness he was actually cremated

 

[Disco]

If Walt actually rolled over in his grave as many times as people say this, he would have spun his way to China.

Thank goodness he was actually cremated

What? You lie!
He was frozen in a cryogenic tank. They believe in the next ten years or so they'll be able to bring him back.
The streets will run red with the non-believers then...

 

[skiingfast]

Regarding Apple, the key is Jobs, not Apple. His health is probably the biggest factor in anything he (they) would do BUT even though Apple itself hasn't always been consumer friendly the key word isn't Jobs or Apple, it's PIXAR. Jobs was practically Walt incarnate at the helm of one of the the most innovative and imaginative Companies of our time. Walt would rise out of the freezer and help reorganize the Company should Jobs takeover, IMO.

Seriously? Apple has never invented a novel product. All Jobs ever did was look at another company's product and have Apple redesign it. Jobs was nothing but the marketing front of the company.