A Spirited Perfect Ten

ParentsOf4

ParentsOf4

Well-Known Member
John said:
I seen some stupid things in my life but that play call was the stupidest in the history of the Super Bowl.....somebody better check on the city of Seattle. It might not be there in the morning.
Click to expand...
Exactly right. You telling me they don't give Marshawn Lynch at least one chance to run it in from the 1 yard line?

I guess we know who's going to Disney World. ;)
 
GoofGoof

GoofGoof

Premium Member
ford91exploder said:
I'm really wondering what the NEXT management team is going to do, If they reinvest in the business the 'Street will brutalize them because TWDC has little cash on hand TO reinvest, Pretty much their only assets are IP, Real Estate and Content Production and the Theme Parks. The stock while high now is of little value to them.

I don't think the next management team will have many options besides selling the components of the company which of course goes back to @WDW1974 's point of what makes Disney Disney. The other options are of course just accumulating cash while doing some minor work on the cable properties and P&R, The big question is will the 'Street allow TWDC the breathing room.
Click to expand...
I don't think the situation is that bleak. As of 9/30/14 TWDC had $3.4B in cash and they are generating close to $10B in operating cash flows every year (source = TWDC 10K;)). There's no cash shortage there.

The new management team will not have any need to sell off components of the company if they don't want to. What they will need to decide is what to do with all the cash thrown off by the various business units. Whether it's reinvestment in the current business, acquisitions of new businesses or returning capital to shareholders they will have to find the right mix. Returning capital to shareholders is not actually a bad thing, but the recent trend of stock buybacks was excessive. There is certainly no argument to be made that the DIS stock is underpriced or a bargain anymore so continued aggressive buybacks don't make much sense.

IMHO Disney is well setup for long term success if the right person is selected to replace Iger. Assuming the weatherman doesn't get another contract extension beyond 2018 and there isn't some major economic downturn the new CEO will be inheriting a company operating at a high level with a number of recent successful years. It won't be like Iger taking over for Eisner after a downturn or Eisner taking over as the company is about to be split up and sold in pieces. This may make dramatic change more difficult since shareholders are pretty happy with the status quo. A strong leader needs to step in or you can almost guarantee there won't be much of a change.
 
Q

Quinnmac000

Well-Known Member
John said:
I seen some stupid things in my life but that play call was the stupidest in the history of the Super Bowl.....somebody better check on the city of Seattle. It might not be there in the morning.
Click to expand...

They decided they didn't want to go to Disneyworld, deal with fastpass+, not fully maintained rides, and construction walls everywhere. Now they are free to go to Uni without judgement!
 
Cesar R M

Cesar R M

Well-Known Member
GoofGoof said:
I don't think the situation is that bleak. As of 9/30/14 TWDC had $3.4B in cash and they are generating close to $10B in operating cash flows every year (source = TWDC 10K;)). There's no cash shortage there.

The new management team will not have any need to sell off components of the company if they don't want to. What they will need to decide is what to do with all the cash thrown off by the various business units. Whether it's reinvestment in the current business, acquisitions of new businesses or returning capital to shareholders they will have to find the right mix. Returning capital to shareholders is not actually a bad thing, but the recent trend of stock buybacks was excessive. There is certainly no argument to be made that the DIS stock is underpriced or a bargain anymore so continued aggressive buybacks don't make much sense.

IMHO Disney is well setup for long term success if the right person is selected to replace Iger. Assuming the weatherman doesn't get another contract extension beyond 2018 and there isn't some major economic downturn the new CEO will be inheriting a company operating at a high level with a number of recent successful years. It won't be like Iger taking over for Eisner after a downturn or Eisner taking over as the company is about to be split up and sold in pieces. This may make dramatic change more difficult since shareholders are pretty happy with the status quo. A strong leader needs to step in or you can almost guarantee there won't be much of a change.
Click to expand...

Imho, when you're a corporation.. and your business goes to carp.. You start burning money fast. Look at Sony.
They were top dog and burned thru a lot of money.. and had to spinoff parts.
 
Clamman73

Clamman73

Well-Known Member
When you find out how much that Poly Bungalow is going to cost you...
image.jpg
 
ford91exploder

ford91exploder

Resident Curmudgeon
GoofGoof said:
I don't think the situation is that bleak. As of 9/30/14 TWDC had $3.4B in cash and they are generating close to $10B in operating cash flows every year (source = TWDC 10K;)). There's no cash shortage there.

The new management team will not have any need to sell off components of the company if they don't want to. What they will need to decide is what to do with all the cash thrown off by the various business units. Whether it's reinvestment in the current business, acquisitions of new businesses or returning capital to shareholders they will have to find the right mix. Returning capital to shareholders is not actually a bad thing, but the recent trend of stock buybacks was excessive. There is certainly no argument to be made that the DIS stock is underpriced or a bargain anymore so continued aggressive buybacks don't make much sense.

IMHO Disney is well setup for long term success if the right person is selected to replace Iger. Assuming the weatherman doesn't get another contract extension beyond 2018 and there isn't some major economic downturn the new CEO will be inheriting a company operating at a high level with a number of recent successful years. It won't be like Iger taking over for Eisner after a downturn or Eisner taking over as the company is about to be split up and sold in pieces. This may make dramatic change more difficult since shareholders are pretty happy with the status quo. A strong leader needs to step in or you can almost guarantee there won't be much of a change.
Click to expand...

I do see the situation as bleak for a new management team, One of the fundamental drivers of TWDC's stock price has been the aggressive repurchase program without the ongoing purchases EPS will drop and drop significantly leading to a significant reduction in share price, Which will lead to lots of short interest in TWDC.

A new leader is going to need to show profits FAST otherwise the Kerkorian's and other vultures (the stock loss Lawyers and professional plaintiff's bar) will be circling and TWDC will be under a great deal of pressure from those who want to break it up as the parts WILL be worth far more than the whole.

3.4B in cash is not a great deal of cash on hand especially considering their closest competitor has nearly TWICE as much and the operating cash flow has largely been dedicated to share repurchase after funding OPEX.

The worst thing Iger has done is with the huge buyback program he has left a new management team a heavily loaded aircraft with a short amount of runway and the pilot can see the stripes.

TWDC will indeed be living out the ancient chinese curse 'May you live in interesting times" after Iger is no longer at the helm.

And NONE of these scenarios works out well for P&R.
 
GoofGoof

GoofGoof

Premium Member
Cesar R M said:
Imho, when you're a corporation.. and your business goes to carp.. You start burning money fast. Look at Sony.
They were top dog and burned thru a lot of money.. and had to spinoff parts.
Click to expand...
ford91exploder said:
I do see the situation as bleak for a new management team, One of the fundamental drivers of TWDC's stock price has been the aggressive repurchase program without the ongoing purchases EPS will drop and drop significantly leading to a significant reduction in share price, Which will lead to lots of short interest in TWDC.

A new leader is going to need to show profits FAST otherwise the Kerkorian's and other vultures (the stock loss Lawyers and professional plaintiff's bar) will be circling and TWDC will be under a great deal of pressure from those who want to break it up as the parts WILL be worth far more than the whole.

3.4B in cash is not a great deal of cash on hand especially considering their closest competitor has nearly TWICE as much and the operating cash flow has largely been dedicated to share repurchase after funding OPEX.

The worst thing Iger has done is with the huge buyback program he has left a new management team a heavily loaded aircraft with a short amount of runway and the pilot can see the stripes.

TWDC will indeed be living out the ancient chinese curse 'May you live in interesting times" after Iger is no longer at the helm.

And NONE of these scenarios works out well for P&R.
Click to expand...
I can't predict what the next 3 years will bring. Based on the lineup of Marvel/Star Wars movies, a pretty stable short term earnings picture from ESPN and the parks which are seeing record attendance and generally good results I don't think the situation will get so bad by 2018 when Iger steps down that they will be looking to sell off parts of the company. We can agree to disagree on this point.
 
ford91exploder

ford91exploder

Resident Curmudgeon
GoofGoof said:
I can't predict what the next 3 years will bring. Based on the lineup of Marvel/Star Wars movies, a pretty stable short term earnings picture from ESPN and the parks which are seeing record attendance and generally good results I don't think the situation will get so bad by 2018 when Iger steps down that they will be looking to sell off parts of the company. We can agree to disagree on this point.
Click to expand...

Yes we can, before moving on to Cheesesteaks/Pizza/Super Bowl - My final point is right now with the buyback program TWDC has the proverbial tiger by the tail, How do you keep EPS and the stock price UP if you end the buyback program EPS will fall although the balance sheet will be healthier. This is the question for the ages.

Now about those Cheesesteaks :hungry:, And what's going on with the NFL I thought the fix was in for the Seahawks to win tonight :D
 
GoofGoof

GoofGoof

Premium Member
ford91exploder said:
Yes we can, before moving on to Cheesesteaks/Pizza/Super Bowl - My final point is right now with the buyback program TWDC has the proverbial tiger by the tail, How do you keep EPS and the stock price UP if you end the buyback program EPS will fall although the balance sheet will be healthier. This is the question for the ages.

Now about those Cheesesteaks :hungry:, And what's going on with the NFL I thought the fix was in for the Seahawks to win tonight :D
Click to expand...
EPS won't fall if you stop buying shares back as long as earnings themselves don't drop. Keep in mind too that some of the $10B of cash flows should and will continue to go back to shareholders. So you're not stopping all buybacks or dividends just reducing them.

I didn't have a cheesesteak tonight, but I did have some good homemade wings. I couldn't decide which team I liked less in the Super Bowl so I didn't really have a rooting interest. Maybe just rooting for a wardrobe malfunction at halftime;)
 
ford91exploder

ford91exploder

Resident Curmudgeon
GoofGoof said:
EPS won't fall if you stop buying shares back as long as earnings themselves don't drop. Keep in mind too that some of the $10B of cash flows should and will continue to go back to shareholders. So you're not stopping all buybacks or dividends just reducing them.

I didn't have a cheesesteak tonight, but I did have some good homemade wings. I couldn't decide which team I liked less in the Super Bowl so I didn't really have a rooting interest. Maybe just rooting for a wardrobe malfunction at halftime;)
Click to expand...

We were ALL hoping for a 'Wardrobe Malfunction' at halftime (at least the guys in our house were) the women not so much...
 
Nubs70

Nubs70

Well-Known Member
GoofGoof said:
EPS won't fall if you stop buying shares back as long as earnings themselves don't drop. Keep in mind too that some of the $10B of cash flows should and will continue to go back to shareholders. So you're not stopping all buybacks or dividends just reducing them.

I didn't have a cheesesteak tonight, but I did have some good homemade wings. I couldn't decide which team I liked less in the Super Bowl so I didn't really have a rooting interest. Maybe just rooting for a wardrobe malfunction at halftime;)
Click to expand...
Earnings per share will being to flatline given earnings stay steady as buybacks stop shrinking the denominator.
 

Register on WDWMAGIC. This sidebar will go away, and you'll see fewer ads.

Back
Top Bottom