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Could Disney face another hostile takeover attempt?

Slpy3270

Well-Known Member
Loeb demands permanent suspension of dividend, calls on Disney to invest more in, and move more blockbusters to, streaming.

There's no way this doesn't end in the company being broken up into pieces.
 

Disney Irish

Premium Member
Breaking up companies to increase short-term profits has always been activist investors' MO. It's why Time Warner sold off Time Inc. despite being one half of the company's name.
Except as mentioned in the other thread that not what Loeb is requesting being done. So while I get that may have happened with other companies, it doesn't look to be the case at this point with Disney investors especially Loeb.

So while I appreciate your opinion here, I just think its a bit too early to claim a break up of the company is inevitable.
 

el_super

Well-Known Member
Breaking up companies to increase short-term profits has always been activist investors' MO. It's why Time Warner sold off Time Inc. despite being one half of the company's name.

Dan Loeb wasn't advocating for breaking up the company. He was advocating that, instead of issuing a dividend payment, Disney use that money to focus more on Disney+, and shift their distribution strategy from movie theaters to streaming (which makes sense). How on earth did you jump to the conclusion that breaking up the company would follow?
 

Slpy3270

Well-Known Member
Dan Loeb wasn't advocating for breaking up the company. He was advocating that, instead of issuing a dividend payment, Disney use that money to focus more on Disney+, and shift their distribution strategy from movie theaters to streaming (which makes sense). How on earth did you jump to the conclusion that breaking up the company would follow?
>Institutional investors dump stock over lack of dividend payments, causing stock price drop
>Hedge funds takes advantage of drop and start buying stock
>Hedge funds force Disney to spin-off Media Networks and Studios units, both far more profitable than DTCI will ever be, and become solely a theme park and streaming company
>Chapek and board keeps their jobs
 

Disney Irish

Premium Member
>Institutional investors dump stock over lack of dividend payments, causing stock price drop
>Hedge funds takes advantage of drop and start buying stock
>Hedge funds force Disney to spin-off Media Networks and Studios units, both far more profitable than DTCI will ever be, and become solely a theme park and streaming company
>Chapek and board keeps their jobs
So in your scenario Disney goes from a maker of content to solely being a purchaser of content. Meaning that all true value in the company will be lost in this scenario. Because all IP associated with those businesses would be lost. In addition Disney loses all the licensing revenue which is also a major source of income.

And you jumped to that conclusion because an investor said Disney should be using their money to invest more in DTC instead of a dividend. A dividend mind you that has already been suspended for this year anyways. And no institutional investor has majorly dump the stock because of it.

So yeah I don't see any of that happening.
 

el_super

Well-Known Member
>Institutional investors dump stock over lack of dividend payments, causing stock price drop
>Hedge funds takes advantage of drop and start buying stock
>Hedge funds force Disney to spin-off Media Networks and Studios units, both far more profitable than DTCI will ever be, and become solely a theme park and streaming company
>Chapek and board keeps their jobs

OH ... ok yeah sure ... I see now. Uh huh.

When do you think they will be announcing the break up? Tomorrow? Maybe next week?
 

Slpy3270

Well-Known Member
OH ... ok yeah sure ... I see now. Uh huh.

When do you think they will be announcing the break up? Tomorrow? Maybe next week?
They take time. Carl Ichan was the one who proposed breaking off the telecom, publishing and AOL businesses from Time Warner in 2006. That didn't happen until 2009 (AOL and Time Warner Cable) and 2014 (Time Inc.).
 

MisterPenguin

Fully Pfizered!
Premium Member
>Institutional investors dump stock over lack of dividend payments, causing stock price drop
>Hedge funds takes advantage of drop and start buying stock
>Hedge funds force Disney to spin-off Media Networks and Studios units, both far more profitable than DTCI will ever be, and become solely a theme park and streaming company
>Chapek and board keeps their jobs

While these can be a concern, the counterarguments are:
  • Loeb is already a big investor and he's willing to forego his own dividends for the sake of higher stock from a more successful Disney that isn't as reliant on the travel/vacation industry. Thus, he's giving cover for Disney if other investors complain.
  • Disney has already stopped dividends and its stocks haven't plummeted
 

el_super

Well-Known Member
They take time. Carl Ichan was the one who proposed breaking off the telecom, publishing and AOL businesses from Time Warner in 2006. That didn't happen until 2009 (AOL and Time Warner Cable) and 2014 (Time Inc.).

So basically you can say you were right if Disney gets broken up anytime between now and 2032? I guess there isn't much to do but wait and see.
 

AnotherDayAnotherDollar

Well-Known Member
Loeb demands permanent suspension of dividend, calls on Disney to invest more in, and move more blockbusters to, streaming.

There's no way this doesn't end in the company being broken up into pieces.

Yes, of course! Mainly because Loeb was really successful in his two attempts to make Sony split up the company into pieces.
 

mharrington

Well-Known Member
Original Poster
I apologize if I have already asked before, but is there a chance that Disneyland may never reopen?

With all the drama going on right now over reopenings, I can't help but think that at some point, Disney and Universal are going to have to make some tough financial decisions about their California parks if the situation doesn't improve soon. Disney has already laid off many of its employees.
 

mharrington

Well-Known Member
Original Poster
It was a joke. ;)

Okay, but seriously, the ongoing closure cannot be good for Disney or Universal financially. If the situation doesn't improve with Sacramento soon (in being provided with guidelines, never mind actual reopening), then they may have to make some decisions about possibly shutting down for good. At some point, their assets will become liabilities. Do you really think they will want liabilities on their hands? I don't.
 

Disney Irish

Premium Member
Okay, but seriously, the ongoing closure cannot be good for Disney or Universal financially. If the situation doesn't improve with Sacramento soon (in being provided with guidelines, never mind actual reopening), then they may have to make some decisions about possibly shutting down for good. At some point, their assets will become liabilities. Do you really think they will want liabilities on their hands? I don't.
This is not a political thread, please do not discuss political here those topics need to be discussed over in the political forum. And yes Disneyland will open again, we don't know when, but it will open again. There is no chance Disney never reopens and sells Disneyland.
 

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