Is Disney going broke

[john7994]

Just a nurse here without an MBA but if I remember correctly didn't Comcast try a hostile takeover of Disney in the 90's

Early 2004 and the "price" being thrown around was $50-60 Billion at the time.

 

[TiggerBouncy]

Hostile takeovers are extremely rare and I don't think there's ever been one attempted in history for a company the size of Disney. Elon Musk had to borrow against everything he owns and sell a bunch of Tesla to buy Twitter and it's far smaller than Disney.

Numbers-wise, to do a "hostile takeover", a company would have to spend over $100 billion at the current price to buy 50%+ 1 share of Disney (thus giving them control).

Elon is bringing it private. And he was financing something that doesn't have a winning business model. That's why the banks balked - there was not a good path to making the money back. He also didn't sell everything he had - he is worth over 250 billion and he only is investing about 20 billion himself - less than 10%. If he wanted to fund everything he had, he actually could purchase Disney by himself.

That aside, Disney is a different animal all together. It's hugely profitable. An sufficiently large company with enough assets could make a reasonable go at it and find willing bank rolls. Note I am talking about a company, not an individual. There are much larger fish than Disney (about 97B). Comcast is still over twice Disney's size, and let's not even talk about the likes of Apple, Google or Amazon (1.57 trillion) - all content creators that could leverage the IP they would get from Marvel, Pixar, Disney, FOX, National Geographic and ESPN in one nice gift wrapped package.

Just a nurse here without an MBA but if I remember correctly didn't Comcast try a hostile takeover of Disney in the 90's

They did. To the tune of about 54 Billion. However, Disney is a lot bigger now (it would cost them about double that).

But there ARE companies that can come up with the price to purchase Disney (as mentioned, there were rumors of Apple wanting to make a go of it before the pandemic - and if they were thinking about it when the stock was $180, then right now it's a bargain in the making). Again, I do not think it's likely - it would be a very large acquisition. However, if you wanted Disney, now is the time.

 

[john7994]

That aside, Disney is a different animal all together. It's hugely profitable. An sufficiently large company with enough assets could make a reasonable go at it and find willing bank rolls. Note I am talking about a company, not an individual. There are much larger fish than Disney (about 97B). Comcast is still over twice Disney's size, and let's not even talk about the likes of Apple, Google or Amazon (1.57 trillion)

I vote Apple

 

[TiggerBouncy]

I vote Apple

To be fair, we do not know that Apple was seriously considering it. The rumors abounded because Apple has been trying to find a winning strategy for content creation and not just distribution. They have a fledgling business now which they have spend a lot of money trying to develop (Apple+). They also have the money to bankroll an acquisition like Disney (they are sitting on a war chest of over 200B IN CASH ASSETS). I.E. they wouldn't even need to finance it (which is INSANE).

I.E. the business model makes sense for them and they have the financial ability to do it.

None of that says they WILL or are interested. Just that from a business model standpoint it makes sense and they could.

 

[john7994]

To be fair, we do not know that Apple was seriously considering it. The rumors abounded because Apple has been trying to find a winning strategy for content creation and not just distribution. They have a fledgling business now which they have spend a lot of money trying to develop (Apple+). They also have the money to bankroll an acquisition like Disney (they are sitting on a war chest of over 200B IN CASH ASSETS). I.E. they wouldn't even need to finance it (which is INSANE).

I.E. the business model makes sense for them and they have the financial ability to do it.

None of that says they WILL or are interested. Just that from a business model standpoint it makes sense and they could.

Rumor or not ... best synergies or not ... best purchase in the world or not ... I still vote Apple
Historically, I know they don't go after the big purchases, but the timing is only getting better and I don't want Google or Amazon to buy it either

 

[Jonfw2]

Elon is bringing it private. And he was financing something that doesn't have a winning business model. That's why the banks balked - there was not a good path to making the money back. He also didn't sell everything he had - he is worth over 250 billion and he only is investing about 20 billion himself - less than 10%. If he wanted to fund everything he had, he actually could purchase Disney by himself.

That aside, Disney is a different animal all together. It's hugely profitable. An sufficiently large company with enough assets could make a reasonable go at it and find willing bank rolls. Note I am talking about a company, not an individual. There are much larger fish than Disney (about 97B). Comcast is still over twice Disney's size, and let's not even talk about the likes of Apple, Google or Amazon (1.57 trillion) - all content creators that could leverage the IP they would get from Marvel, Pixar, Disney, FOX, National Geographic and ESPN in one nice gift wrapped package.



They did. To the tune of about 54 Billion. However, Disney is a lot bigger now (it would cost them about double that).

But there ARE companies that can come up with the price to purchase Disney (as mentioned, there were rumors of Apple wanting to make a go of it before the pandemic - and if they were thinking about it when the stock was $180, then right now it's a bargain in the making). Again, I do not think it's likely - it would be a very large acquisition. However, if you wanted Disney, now is the time.

There is no doubt that there are companies big enough to mortgage the farm and buy Disney. But it would never ever happen by hostile takeover.

 

[TiggerBouncy]

There is no doubt that there are companies big enough to mortgage the farm and buy Disney. But it would never ever happen by hostile takeover.

Well, it doesn't have to be hostile true. But the point is with the stock so low, you could make a reasonable go at it and get it for a bargain price. Im just not sure the board would buy-in. I could see a hostile start and a white knight buyout in the current market scenario.

 

[Jonfw2]

Well, it doesn't have to be hostile true. But the point is with the stock so low, you could make a reasonable go at it and get it for a bargain price. Im just not sure the board would buy-in. I could see a hostile start and a white knight buyout in the current market scenario.

These massive companies don't want to damage their reputations in the business community by doing something like that. They all know each other. They've all worked together in the past or know they might in the future. They also know Disney has a pristine image in the marketing sense and they wouldn't want to damage that. Plus, they'll need happy managers and board members to be onboard after the fact- not disgruntled lame ducks. Not to mention that this would be the most complex merger in US history from a regulatory standpoint.

The only way a buyout (or merger) would happen is if a company went straight to the board and made a negotiated offer. Which, if this happened, would be at far above the current price.

 

[BaybeeYoda]

I am one of the masses too. Had 650 DVC points and all 5 of us had APs. Was adding DVC left and right in hopes to get enough to snow bird there. But then all the changes happened and we became disenchanted. Now we are down to 300 points and 2 APs. Used to do almost 3 weeks a year and now will do random nights here and there as we bought a house in Kissimmee. And no buying Genie+ for us. We paid to ride one ride (1st time to try Mickey's Runaway Railway and talk about a waste of $20 each). Don't care to ride the rides or do the dining anymore. Only thing we enjoy now is Epcot festivals and hanging at DS. May not even need to keep our APs. And considering getting a Universal pass. Haven't even looked at this new MB thing. Saw mention on FB but don't care. Won't EVER pay for a MB. Do just fine with our old ones and when they die (only seem to last 2 years) we will do just fine with a plastic card like DD-23 just had to use since she lost her MBs.

Ahhh, I have grade schoolers still. Maybe when they no longer obsess about Disney, I’ll fly the coop.

300 pts is not insignificant….

We have 400 and we find that too many unless we invite extended family

 

[ChipnDale79]

i stopped reading...but did someone really throw out the "well i have an MBA" line?

 

[gregskellington]

i stopped reading...but did someone really throw out the "well i have an MBA" line?

Yes, but in all fairness someone also made a topic about Disney going broke based on a Breitbart article so this thread was a train wreck from the onset.

 

[ChipnDale79]

Yes, but in all fairness someone also made a topic about Disney going broke based on a Breitbart article so this thread was a train wreck from the onset.

ahhh...when i see Breitbart, i already know we're in a train wreck.

i see your point.

 

[TiggerBouncy]

These massive companies don't want to damage their reputations in the business community by doing something like that. They all know each other. They've all worked together in the past or know they might in the future. They also know Disney has a pristine image in the marketing sense and they wouldn't want to damage that. Plus, they'll need happy managers and board members to be onboard after the fact- not disgruntled lame ducks. Not to mention that this would be the most complex merger in US history from a regulatory standpoint.

The only way a buyout (or merger) would happen is if a company went straight to the board and made a negotiated offer. Which, if this happened, would be at far above the current price.

Above the current price - agreed. But still I would argue less than it would have cost them 6 months ago. Can we agree on that point?

 

[Jonfw2]

Above the current price - agreed. But still I would argue less than it would have cost them 6 months ago. Can we agree on that point?

Oh, 1000% yes. Probably closer to current than former, in fact.

 

[john7994]

So back to Apple ....

 

[Jonfw2]

So back to Apple ....

These Apples are delicious…
“As a matter of fact, they are”, she said.

 

[john7994]

These Apples are delicious…
“As a matter of fact, they are”, she said.

Don't shatter the dream ... Apple already does a better job with "magicbands" ...

 

[PBB]

Disney isn’t going broke, however, they may have problems borrowing money in the future now their value is down 50 billion in a year. They should have a good movie season but it won’t be enough to turn things around that fast. They could have to start postponing future projects like a new DVC Hotel at Poly. The best thing for Disney is to eject current management. The employees and the fans don’t have confidence in Chapek.

 

[SuzErwin]

Apple and Disney were twinned in the public's mind way back because Disney bought Pixar, making Steve Jobs one of Disney's largest individual shareholders at the time Jobs was running Apple.

But Apple has no interest in Disney. And even if Apple were interested in the content side, it has zero interest in hospitality business lines that are far out of its sweet spot so the theme parks/cruise ships/resorts would be sold off. And they are definitely not interested in broadcast/cable TV, so ABC and the cable networks would be sold as well (and the single largest source of revenue for Disney is television affiliation fees).

Disney has no hardware or software business to speak of, so Apple would be gaining no efficiences there.

The two business models aren't a fit. And as AT&T's hurried divestiture of Time Warner shows, buying a content company that isn't a fit with your primary business is...not recommended.

And Apple isn't interested in spending very big money just to get content, because content for Apple is a side business and is used as a loss leader to entice people to stay in the Apple ecosytem which is its primary business (i.e. buy an Apple product, get a subscription to AppleTV+). If Apple lost its streaming business tomorrow, big whoop. They would be just fine selling iPhones, iPads, Apple Watches, computers, etc. and taking a cut of the apps people put on them. And Apple doesn't need a Disney for prestige content, either. It's doing fine on its own. Ted Lasso is a multiple-award winning series. Coda won the Oscar.

Although stock price is not directly related to revenue, stock price can affect the ability to secure loans and financing which could affect Disney's ability to create new rides and other guest attractants (not to mention build IP and content). Disney is not so big that they can self-finance everything they want to do or that unfavorable loan conditions would not drag on the company's bottom line.

You're confusing equity with debt. Convertible debt is issued on cash flow and risk, not the stock price.

Like individual consumers, companies have credit ratings. Fitch Ratings has Disney at A-. They downgraded Disney from an A during the pandemic due to decreased revenues and Disney's perceived financial inflexibility to respond. In their last bulletin, issued a year ago, they kept Disney at A- but moved the outlook to stable.

Having said all that, I agree with others - Disney is not going broke. However, they do have the "honor" of being the worst preforming stock in the Dow and it does make them potentially a target for a hostile takeover. Do I think that's likely? Not really - after all, they were down to the 90's previously and although a few companies eyed them, no one took a bite. But if someone wanted a deal on Disney, they are at market bottom prices right now.

Yeah, no. Disney's market cap at time of writing is $205.02 billion even with the decrease in stock price.

Ironically, Disney almost bought Twitter.

I also think it's going to take them a while to pull back out of this slump. I do not consider them a great stock to buy up right now. Sure they will probably eventually recover and you will probably make some money in the long run, but there are better deals to be had that will be far more profitable in a shorter timeframe.

Analysts disagree with you and rate Disney stock a buy here, here, and here. But it's your money, you do what you want with it. *shrug*

 

[Jonfw2]

Don't shatter the dream ... Apple already does a better job with "magicbands" ...

It’s a Barenaked Ladies lyric.