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Disney to buy-back shares
- Thread starter Figaro928
- Start date
Simba's Mom
Well-Known Member
Wow, $65/share! I bought at $20/share shortly after 9/11. at the time, my coworkers thought I was crazy. Since then, I have Dividend reinvestment, so I haven't really paid all that much attention. Have to think now!
afar28
Well-Known Member
I could come up with a lot of things Disney could use with that money lol
Victor Kelly
Well-Known Member
Kill FP+?
Unplugged
Well-Known Member
I'm sure they're doing the same thing many other major corporations are, including the most recent extreme version of Dell going from publicly traded to privately owned. Buying back shares keeps the value high but more so removes some of the power Wall Street has over tanking their stock over some arbitrary earnings number they set and not the actual numbers Disney sets. My employer and many other fortune 500 companies do this on a regular basis, but it seems more so in the past few years. It helps limit the externally controlled fluctuation on the corporations value.
TowerOfTerror
Well-Known Member
Whoever does not see this as a positive is a fool. Anytime Disney can buy back shares it is a step in the right direction for the company long term since it eases the ever demanding pressures of quarterly profits. Hopefully one day Disney can be a private entity and it will be a glorious day for all Disney fans and the end of everything value engineered will be finished. Sadly with 1.79 billion outstanding shares it will take a while to accomplish this feat.
Gabe1
Ivory Tower Squabble EST 2011. WINDMILL SURVIVOR
GoofGoof
Premium Member
They should have used the Nextgen billion+ to buy back shares too.
danv3
Well-Known Member
Yeah, I'm kind of surprised they see this as their best use of funds given the investments up the road in Orlando.
Clever Name
Well-Known Member
If this goes as planned, it's going to cement Jay Rasulo as the next CEO and it will set the stage for possible P&R divestiture.
Just like Universal couldn't think of anything better to do than expand Potter. In other words, anytime a company spends money on something, they do it because they thought it was the best way to spend the money, and couldn't think of a better way.
There is no chance this will end the pressure on profits. Disney has too large a public float to go private without a massive restructuring that would leave the company unrecognizable.
Nonetheless, it is positive for other reasons if you're an investor. It is not positive from the perspective of a park-goer.
ford91exploder
Resident Curmudgeon
Six Flags or Cedar Faire??? Seriously I see P&R being sold off in the next 3-5 years or so alternatively closure of EPCOT and DHS to be replaced with a Casino complex as neither park has seen any investment in years besides the Star Tours re-theming and ride control replacement and EPCOT just has more and more 'closed' signs everywhere.
ford91exploder
Resident Curmudgeon
Potter has cross generational appeal and the attraction is actually several attractions and even the current incarnation of HP boosted UNI's gate by 20%
DrewmanS
Well-Known Member
Disney has been buying back shares for years, they only said they will double the volume in 2014. A company buying back shares in no way helps it go private. A company can not own itself, an invester would have to purchase all outstanding shares to go private. As shares are bought back, the number of outstanding shares is reduced and the value of the company is then spread across fewer shares, thus raising its share price. This is a method of returning value to shareholders while avoiding taxes on dividends and (I believe) retained earnings. Disney can either retire these shares (removing them from the market permanently) or hold them as treasury shares to later distribute as employee incentives or sell on the open market. However, if the shares are reissued, that would dilute the market and lower stock value. This would normally only be done if the company thought its shares were significantly undervalued and selling at a later date could generate a greater return than the diluted value.
As for it being "better" to spend the money on the parks, for many accounting and tax reasons, it is often better for a company to use cash to buy back shares and then borrow money for capital projects. I don't fully understand it, but it comes down to doing everything you can to increase the value of the company while minimizing the taxable earnings.
As for it being "better" to spend the money on the parks, for many accounting and tax reasons, it is often better for a company to use cash to buy back shares and then borrow money for capital projects. I don't fully understand it, but it comes down to doing everything you can to increase the value of the company while minimizing the taxable earnings.
Which is why Uni decided there was noting better to spend money on. My point is that saying Disney is buying back stock because it can't find anything better to do with the money is self-evident. Companies spend money on whatever they think is the best thing they can do. Hence it is always the case that the company "couldn't find anything better to do with the money" than whatever it decided to do.
ford91exploder
Resident Curmudgeon
I'm well aware of the accounting twists and turns, In a prior life I wrote accounting systems, This is strictly a short term move which will damage long term shareholder value.