How much of the DIS stock plummet is related to the parks? In particular, WDW..

[Model3 McQueen]

As you may or may not have heard, DIS stock had closed today at it's lowest point in roughly 9 years at $82 a share.

If I remember correctly, in the last earnings call, theme park revenue was as high as ever but attendance was lower. However, we read complaints all the time of slow construction, bad maintenance, price gouging, lower quality products, no more originality / vision in crafting new experiences, bad CM treatment, etc etc.

In your opinion and your analysis, how much of the stock plummet has to do with the theme parks? WDW in particular since it is the worldwide hot spot compared to LA's Disneyland. Is it the only thing holding DIS from falling harder? How much longer do you think that'll last in the company's current direction?

Bonus challenge: Give us a bull case argument to invest in Disney right now lol

 

[DisneyFanatic12]

I doubt much if any of the drop is due to the theme parks. It’s the same reason I think they really don’t interest investors, because they’re extremely consistent and almost always make money. Sure there might be an overall decline in attendance, but if profits are still high, why should the investor care? If Apple can sell 10 iPhones at $500 and 5 iPhones at $1,000, why should they investor care if they start selling $1,000 iPhones? They’re going to make the same amount of money!



At the end of the day, the investors only care about their money. WDW is (perceivably) going to make money as they have for the last 50+ years.


If I had to guess what the primary reason was, it would be that luxury goods and tourism tends to fall the quickest in the event of a recession. I don’t think anyone is asking the question of if we will go into a recession. We will eventually go into a recession, and when that happens, Disney World (and the other theme parks) are both tourism and a luxury good. In fact, all of the companies products could probably be considered a luxury good…



If you want me to come up with a reason to buy into the company, the fact that this is the lowest stock as been in 9 years is a pretty good reason! The price will go up… eventually. If I had the disposable income, I certainly would’ve bought up Disney stock when it was at its low during Covid. I don’t think it’ll get to $200 range again, but it’ll surely approach $100+ again some day. That’s kind of what the stock market is at the end of the day, legalized gambling. Disney might appear as a high risk stock to many, and as a low risk stock to others.



Now, I really don’t follow Disney stock at all, but from the limited number of things I know, those are my two cents.

 

[donnylambb]

I own a fair amount and I'm still cost averaging today all analysts predict 150+ in the coming years

 

[SteveAZee]

Loss of the dividend and poor streaming numbers are probably bigger factors than any concern about park performance. I would guess that not having a succession plan in place for the top job makes investors a little nervous too.

 

[John park hopper]

If Disneyland and WDW were stand alone and not tied to all other Disney holdings where do you think the stock price would be?

 

[Chef Mickey]

None. It’s all because of their terrible management, terrible strategy, terrible leadership, and terrible vision.

They also aren’t profitable in their growing business and several others are shrinking. Again, poor management.

 

[thomas998]

Disney's biggest problems aren't the resorts, it is the TV assets like ABC and ESPN in a market where more and more people are cutting the cable, the streaming service where they pump more and more money into a system that doesn't seem to know how to keep subscribers or make a profit, and the movies where they pump hundreds of millions into movies that alienate large parts of the public because they appear to be pandering to a insignificant group of squawking social media loons.... The parks are the cash cow. Even when they screw something up they still make money because they have a never ending customers base that still thinks going to Disney is something their kids should do at least once.

The best thing Disney could do is break up the company into separate parts... at the very least a media group with the streaming, TV and movies... and another for the parks and products. But they won't do that because the media group would quickly go bankrupt without the parks to syphon cash from.

 

[TrainsOfDisney]

“Our attendance is shrinking but we’ve found new ways to give them a cheaper product and make them feel like they were ripped off so our current revenue is higher” -

That’s a very questionable long-term business plan.

 

[Lilofan]

I doubt much if any of the drop is due to the theme parks. It’s the same reason I think they really don’t interest investors, because they’re extremely consistent and almost always make money. Sure there might be an overall decline in attendance, but if profits are still high, why should the investor care? If Apple can sell 10 iPhones at $500 and 5 iPhones at $1,000, why should they investor care if they start selling $1,000 iPhones? They’re going to make the same amount of money!



At the end of the day, the investors only care about their money. WDW is (perceivably) going to make money as they have for the last 50+ years.


If I had to guess what the primary reason was, it would be that luxury goods and tourism tends to fall the quickest in the event of a recession. I don’t think anyone is asking the question of if we will go into a recession. We will eventually go into a recession, and when that happens, Disney World (and the other theme parks) are both tourism and a luxury good. In fact, all of the companies products could probably be considered a luxury good…



If you want me to come up with a reason to buy into the company, the fact that this is the lowest stock as been in 9 years is a pretty good reason! The price will go up… eventually. If I had the disposable income, I certainly would’ve bought up Disney stock when it was at its low during Covid. I don’t think it’ll get to $200 range again, but it’ll surely approach $100+ again some day. That’s kind of what the stock market is at the end of the day, legalized gambling. Disney might appear as a high risk stock to many, and as a low risk stock to others.



Now, I really don’t follow Disney stock at all, but from the limited number of things I know, those are my two cents.

When some say investors only care about money, what do you think the typical person who invests weekly into their 401K retirement ? Answer - the same exact thing.

 

[thomas998]

“Our attendance is shrinking but we’ve found new ways to give them a cheaper product and make them feel like they were ripped off so our current revenue is higher” -

That’s a very questionable long-term business plan.

It is... but it reminds me of a scam that was perpetrated by I believe it was P T Barnum where he charged people to see some ridiculous thing, then had the people going through a maze of doors and hallways only to end up back on the street and having seen nothing... People didn't want to admit they were snookered so he was able to keep the scam going for quite some time.
Disney is pretty much doing that now... while they might not be giving enough quality to get people to come back for a second round of being kicked in the backside, they still have an ever growing number of new parents to be snookered and not nearly enough snookered customers to spread the word that it isn't worth it anymore. So they can keep this up for a very long time.

 

[TrainsOfDisney]

So they can keep this up for a very long time.

I don’t know about that… the attendance is already declining. Why? Cause the prices are going too high. But the people booking now are willing to pay the premium for the former quality experience… but if that’s getting cut too….. then those people won’t be back and will tell others it’s not worth it anymore.

I used to visit WDW several times a year, I’m typing this from Disneyland because the quality is still here.

 

[Chef Mickey]

I don’t know about that… the attendance is already declining. Why? Cause the prices are going too high. But the people booking now are willing to pay the premium for the former quality experience… but if that’s getting cut too….. then those people won’t be back and will tell others it’s not worth it anymore.

I used to visit WDW several times a year, I’m typing this from Disneyland because the quality is still here.

I used to be OK with price increases when the product was good, but the product is worse than 10 years ago.

I think Disney (especially WDW) has finally seen consumers tap out on higher and higher prices. The folks that could afford it are done for a while and/or don't come as often.

 

[TrainsOfDisney]

the Eisner solution was to raise prices appropriately and continue to expand and build the parks. Sure DCA had its flaws… but it was a bigger success than the Star Wars hotel at the same cost to the company.

Iger doesn’t understand why anyone would go to the parks and he doesn’t like fans of the parks. It’s a really odd situation.

It’s the equivalent of Steve Jobs hating people who like Apple products and only wanting to sell them to families of 4 from Colorado.

 

[AdventureHasAName]

It's mostly "company direction as a whole" issues than park specific. Part of it is the parks and films shut down for a year and hurt revenue generated from those departments. Part of it is the most recent films aren't just not-profitable, but actually resulting in terrible losses for the films department. Part of it is Disney+ isn't competing with Netflix; the growth in subscriptions isn't high enough. Part of it is that the parks experience is significantly diminished and everyone who isn't a super-diehard recognizes it.

 

[DisneyFanatic12]

When some say investors only care about money, what do you think the typical person who invests weekly into their 401K retirement ? Answer - the same exact thing.

I consider an investor just as someone who owns shares in the company. The literal definition, rather than the crazy rich investors on Wall Street. If I owned one share (or less) in the company, I’d consider myself an “investor”.

 

[Lilofan]

I consider an investor just as someone who owns shares in the company. The literal definition, rather than the crazy rich investors on Wall Street. If I owned one share (or less) in the company, I’d consider myself an “investor”.

Correct. My money being invested long term that is what I care about in terms of it working harder than I do ( ie 401K, real estate , etc ).

 

[thomas998]

I don’t know about that… the attendance is already declining. Why? Cause the prices are going too high. But the people booking now are willing to pay the premium for the former quality experience… but if that’s getting cut too….. then those people won’t be back and will tell others it’s not worth it anymore.

I used to visit WDW several times a year, I’m typing this from Disneyland because the quality is still here.

I fully expect visitors to skip the return trips... but so long as you have new parents in the world that believe Disney is a right of passage for them, they will still have customers.

 

[Chi84]

Agree...and the biggest part is they have forgotten to run their business in the name of promoting ideologies and virtue signaling instead of wholesome, family fun. Simple fact. As they have forgotten their biggest customers ARE traditional families with traditional values. This flies in the face of doing anything too extreme and/or against those values. Absolutely a case study in how a few loud people can literally ruin a business.

Iger is at fault for allowing it and even participating in it. Clown.

My hope is shares continue to be under pressure until a takeover, activist, and total house cleaning takes place. Disney's management is a total sewer.

I’m not sure how Disney has forgotten traditional families with traditional values.

The past couple of years my family (me, my husband, two kids with their spouses and our grandchildren-currently 4 of them) have visited WDW and didn’t experience anything that wasn’t family-oriented.

We did notice the mess that is Genie+ and the price increases, but nothing that related to traditional families or family values.

 

[Sirwalterraleigh]

I own a fair amount and I'm still cost averaging today all analysts predict 150+ in the coming years

Wow…your financial advisor live in your mirror, doesn’t he?

It is... but it reminds me of a scam that was perpetrated by I believe it was P T Barnum where he charged people to see some ridiculous thing, then had the people going through a maze of doors and hallways only to end up back on the street and having seen nothing... People didn't want to admit they were snookered so he was able to keep the scam going for quite some time.
Disney is pretty much doing that now... while they might not be giving enough quality to get people to come back for a second round of being kicked in the backside, they still have an ever growing number of new parents to be snookered and not nearly enough snookered customers to spread the word that it isn't worth it anymore. So they can keep this up for a very long time.

…might want to get your research team on that…

 

[Sirwalterraleigh]

I’m very certain that this is why attendance is down at WDW.

Look at chik-fil-a, Dollywood, in-n-out, that’s what the traditional family market wants and they are all killing it business wise.

I’m not saying it’s right or wrong, it’s just plain businesses facts. Don’t alienate your biggest demographic!

I’d bet you dimes to dollars that is not what the data says…

It’s much worse for Disney.

Politics doesn’t stop travel. Money does

In this case…the “figurehead” of that whole brew ha ha is a pathetic has been…in record time too