Spirited News & Observations II -- NGE/Baxter

[MattM]

Why? Disney stock is up. Carsland is awesome, great rides going to Hong Kong Disneyland, Disneyland Paris (which Disney may buyout), and Shanghai is being built, which means more long term profits . . . plus Disney has a cash cow named Star Wars. Can't see how shareholders would be upset, save for huge amounts of capital being spent.

Plus, $DIS is so much more than a theme park company now. Cash cows like ESPN are really adding to the bottom line, merchandising is doing well, interactive is showing improvements. Studios are doing ok.

Really, the main thing holding BACK $DIS is its domestic theme parks (and more WDW than DL in that category).

 

[MattM]

Reading the articles from Iger's stock sells, I don't get the anger. He's made a 45% profit. You'd be a fool not to cash out there.

Like they say...Bulls make money, Bears make money, but pigs get slaughtered.

 

[asianway]

Reading the articles from Iger's stock sells, I don't get the anger. He's made a 45% profit. You'd be a fool not to cash out there.

Like they say...Bulls make money, Bears make money, but pigs get slaughtered.

Hes making the gain because the stock price is run up on unsustainable profits by P&R - its a balloon waiting to burst. At some point they will need to reinvest in WDW especially if NGE tanks and they keep losing market share.

Personally, Im thinking of placing a put on DIS myself....

 

[MattM]

Hes making the gain because the stock price is run up on unsustainable profits by P&R - its a balloon waiting to burst. At some point they will need to reinvest in WDW especially if NGE tanks and they keep losing market share.

Personally, Im thinking of placing a put on DIS myself....

That may not be a bad idea. Especially running up into the quarter this week, since DIS usually runs up then sells off on the news. I bought Disney (along with many other companies) hand over fist back in '09 when it was at $16. There was nothing wrong with the company. Since then, I've sold out of my original investment, plus a solid return, and I'm playing with the houses' money now. But it's had a monster run since '09. I don't like it up here, but if your put helps it get back into the mid-40's I would like it much more there

 

[Darth Sidious]

That may not be a bad idea. Especially running up into the quarter this week, since DIS usually runs up then sells off on the news. I bought Disney (along with many other companies) hand over fist back in '09 when it was at $16. There was nothing wrong with the company. Since then, I've sold out of my original investment, plus a solid return, and I'm playing with the houses' money now. But it's had a monster run since '09. I don't like it up here, but if your put helps it get back into the mid-40's I would like it much more there

Put prices aren't bad right now... if you are looking for a conservative approach on your investment you could make a collar as well.

 

[Darth Sidious]

Just want to clarify something in reference to my previous posts. What Iger and others did was 100% fine in my book... he was cashing out but the timing of his move makes me question it when coupled with some of his quotes recently. Talking about risk in NextGen and Lucasfilm taking a while to pay off makes it seem like he is expecting a dip. The question raised here is that if he was confident in the company to increase in share price... he would have exercised his calls and then hold on to it for a little longer.

As I said before though Insider activity is an absolutely terrible way to analyze a stock in my opinion. It raises the question I posed above but he could also simply be collecting a 'paycheck'. It just isn't telling at all.

 

[asianway]

Even the super Disney supporters on the DISboards are having some BIG privacy concerns and questions. Their latest podcast even featured an online privacy expert who gave her thoughts about the problems with this new system.

This really isnt brought up enough. Like Andy Dufresne, we here on magic are never going to be happy. If we got a new day parade tomorrow, within a year, we would be asking when the next one will be funded. Thats ok - if you never ask, youll never get.

But once you start losing the bread & butter soccer moms, thats when they need to start worrying. The blogger/SMCCP/paid advocates can minimize and discount the voices from the "doom & gloomers" all they want, but now theyre alienating the core audience. And, as Spirit has pointed out, a pixie dust addiction can be overcome.

 

[MattM]

As I said before though Insider activity is an absolutely terrible way to analyze a stock in my opinion. It raises the question I posed above but he could also simply be collecting a 'paycheck'. It just isn't telling at all.

Yep.

 

[Figments Friend]

Your comments struck home with me. As an authentic Baby Boomer who grew up with "Disneyland" (the TV show) and the Mickey Mouse Club, the "nostalgia factor" has been big in driving our family trips, vacations that leg me leave my real stress-filled world behind. But the stress level in WDW vacation planning has been building - the 180-day ADR's, the 7-8 months in advance planning to know what ADR's you want, etc. To some degree, of course, planning can be fun. But I don't go to Disney to be tied to digital devices. I am deeply troubled by what seems to be the looming packaging of "experiences" limiting my choice in favor of supporting predictive modeling. As I read this string and see how BOS explains the erosion of the Magic, the hoops that vacation planning now requires, capital expenses in new, external non-Disney properties, the backs that have been turned to what used to be Disney quality and innovation --- and how BOS seemingly justifies the "milking" of newbies and first-timers, it's tempting to think that Disney has effectively written-off the "aging Baby Boomers" in favor of, well, a new generation that never knew the "old Disney," the old innovation, the old quality, the old ways of doing business. Living as we do in an increasingly "good enough" society, why should Disney be any different I guess. So sad. As I've gotten older, I've been dreading the time when I would be facing my "last trip to Disney." Maybe that's already happened.

I hear ya !

Reminds me of someone i met briefly while out at a small family breakfast spot the other morning...
I admitted to being a fan of the Parks, and was introduced to a 20-something young girl who was presented to me as being a ' big fan' and 'knew everything about Disney'.
So we start talking shop, and it is clear this 20-something only knows 'modern Disney'...and nothing about 'classic/original Disney'. Disney only exsists for her in the 1990s. I was a little surprised....as usually a fan of that magnitude knows at least the basics about the company, characters, and concepts. So she was one of the 'new generation' Disney fans. Clueless as to the legacy of the concept, and only aware of the few recent projects.

So i would imagine people like her are the vast majority now packing the Parks...and pay no mind to the surroundings really. For them, it is just the thrill of being 'at Disney' and they have nothing to compare quality with.

A pity really, but i guess that is a sign of me getting old
I remember, and although i can accept some changes as being needed to keep things going, a lot of the changes are just shallow cop outs and money scrimping.

 

[BryceM]

Something that we like to do at Islands of Adventure is to explore all the quiet and hidden pathways, where there are many. It really brings you back to the days at Walt Disney World where there wasn't a cart somewhere, a Vacation Club hut, or scooters running you over in every little cranny throughout the parks. The feeling that although there are tens of thousands of other people there at that moment in the park, that it feels like it's just you, the place is yours, and you're totally relaxed. That was one of the most special things about WDW that has evaporated.

I'd suggest to anyone visiting IOA to be certain to go out towards the water in the Jurassic Park area and down by Mythos. You'll get terrific views and pure relaxation with that private feeling that seems to no longer exist at the Mouse.

I agree! When I went during Christmas week, it was fantastic to be able to have these quiet, beautiful and relaxing areas of the park. Around Popeyes & Bluto's Barges, there is another quieter area which gives you some great views of the ride and the lagoon itself.

 

[fillerup]

Just want to clarify something in reference to my previous posts. What Iger and others did was 100% fine in my book... he was cashing out but the timing of his move makes me question it when coupled with some of his quotes recently. Talking about risk in NextGen and Lucasfilm taking a while to pay off makes it seem like he is expecting a dip. The question raised here is that if he was confident in the company to increase in share price... he would have exercised his calls and then hold on to it for a little longer.

As I said before though Insider activity is an absolutely terrible way to analyze a stock in my opinion. It raises the question I posed above but he could also simply be collecting a 'paycheck'. It just isn't telling at all.

This seems about right to me.

If you look at Iger's largest insider trading activity for last year, in May of 2012, he excercised options on 1.8M shares at a cost of $57.3M and then immediately sold for $81.6M.

In November, he optioned on 1M shares for $29.5M and then sold for $47.3M.

To me, this is simply financially prudent, especially considering he still owns 1.16 Million shares.

 

[drew81]

This really isnt brought up enough. Like Andy Dufresne, we here on magic are never going to be happy. If we got a new day parade tomorrow, within a year, we would be asking when the next one will be funded. Thats ok - if you never ask, youll never get.

But once you start losing the bread & butter soccer moms, thats when they need to start worrying. The blogger/SMCCP/paid advocates can minimize and discount the voices from the "doom & gloomers" all they want, but now theyre alienating the core audience. And, as Spirit has pointed out, a pixie dust addiction can be overcome.

After hearing what the privacy expert said on DIS, I would definitely have to think about it before I use a Magic I mean Tragicband.

 

[RSoxNo1]

I still think that the 'right' way to interpret Disney's move is that they are still trying to be a Blue Ocean company, they way they have been for decades.

In the past, their moves to a blue ocean have been GOOD ones, leading competition to come along and create a red ocean feeding frenzy and competition. So Disney moved again.

They are still trying to innovate. The only problem is, they are doing it potentially poorly and making some big decisions. In a real way, moving away from attractions and toward Interactive Games and NextGen *is* a Blue Ocean thing... but it remains to be seen if this is daring-but-justified, or daring-and-stupid. The first would mean they are visionary, the latter would mean they made a billion dollar mistake.

At least they can't be accused by Will Rogers of standing still. He once said "even if you're on the right track, if you're standing still you'll be run over." Disney isn't standing still. Unfortunately, I think what they did was CHANGE tracks. They were actually on the right track (building innovative attractions that people want) but decided they should change tracks (build experiences, games, and fastpass tricks), and I think it's a mistake. But the train track analogy captures more of what's wrong than BOS, IMHO.

Is it a Blue Ocean Strategy or is it making infrastructure improvements be a new form of profit?

Things like character meet and greets were never really attendance drivers, but the first Fantasyland proposal included 3 separate meet and greets that were meant to be full fledged attractions. More importantly, the larger scale infrastructure improvements in the form of Next Gen are meant to monetize things that improve guest experience. They couldn't start charging for use of the busses or the monorail, nor could they easily separate those costs from the price of our ticket or hotel room (although I'm sure they do that on the backend). But by installing in park wifi they sought to benefit from this beyond simply pleasing guests. They thought, "Wait, we have them on our network, can't we track their usage? Can't we see what websites they're visiting and use that information somehow?" Presumably someone followed that up with, "Hey, since we're tracking what websites guests visit on our network why not track what they spend... can the Keys to the World card do that? No? Well, what would it take to make that happen?"

 

[Skyway]

Here's my question for those in-the-know:

Why was Baxter so hated in the halls of WDI?

Just as some pixie-dust snorters are accused of being blind to the problems at TDO, I know its easy to put Baxter on a pedestal. There's no denying he was and is a brilliant Imagineer. But it seems too simplistic to cast Baxter as the white knight who was shunned by the evil lords in Glendale and Burbank who didn't appreciate his talent.

Why did Baxter rub others the wrong way? Was he an outspoken Prima Donna that came across as negative or old-fashioned even if his heart was in the right place? Did others feel threatened by him and try to sabotage his career so they could rise above him? Did he try to sabotage others' careers that he didn't think fit his vision for Imagineering?

A politician can have great ideas, but if he can't work with Congress nothing gets done. Why wasn't Baxter able to work with the rest of WDI?

 

[RSoxNo1]

If TDO was serious about improving their "guests" theme park experience, this is almost certainly is what they should do, completely eliminate FP. The lines would move much faster as a result. But this doesn't allow them to "sell" FP+ as a MM+ feature.

The fact that they are doubling down with FP+ and giving us even more tells us what they really think of their "guests".

I simply don't see them conceeding Fastpass entirely. It's a competitive advantage for them.

 

[PirateFrank]

After hearing what the privacy expert said on DIS, I would definitely have to think about it before I use a Magic I mean Tragicband.

Where was the post by the privacy expert....care to share a link?

 

[RSoxNo1]

Interesting, Kevin. I do recall that column now.

For me, there is no shading here. It could not be clearer. Blue Ocean Strategy is an academic rewrite of overtly simple business practices that is not novel nor legitimate. As you read about it, note how many of its proponents -- its supporters -- use words like trick or magic and phrases like smoke and mirrors to describe BOS in practice. It is a fraud, and it is scary-close to being a cult.

(Depending on how much research you want to do, the more you read of it, the clearer this troubling aspect becomes. As do the similarities to virtually every aspect of Disney's NEXT GEN experience.)

Not sure why, but I really enjoyed the following comment on an HBR article by the professors behind/authors of Blue Ocean Strategy. Poster 'Emelie H.' wrote:

"A person does not come to 'know' BOS, rather, a person manifests as a BOS incarnate! BOS is a movement not a static place where one arrives at then absorbs through studying it and learning it. It is the space of non-creation which is exactly why not many can see it and discover it's force field. BOS is nothing but a label to describe a non-space within a space. Post-Industrial Business is to Newton's Physics the way BOS is to Quantum Physics."

While I agree with much of what you wrote in that column from 2011, it is also noteworthy that Kevin writes from/lives in something of an academic aerie. The real world is often radically different and lacking in the predictability of a college campus and the all-too-structured lectures given there. Odd that we arrive at a similar conclusion while going down decidedly different paths ... or, perhaps, it is just a reflection that, again, there is nothing new or 'real' to BOS. The interpretation of the so-called methodology is open, the result remains the same when it is taken to its natural conclusion.

It is trickery, magic ... smoke and mirrors. As a strategy, that is. And I strongly suspect The Weatherman knows this. It is a short-term, defined-lifecycle explanation for -- metaphorically -- milking the cow until the udders go dry knowing you have some prime burger meat hanging on the bones.

Now, tell me please, why does no one think it is a VERY troubling sign that Bob Iger is the first CEO in the history of TWDC to sell just about every share of Disney stock he can as soon as he can? I mean, he is not a poor man, he does not need the money. Why sell shares in the company you helm, the company whose trajectory is dictated by your decisions? ... Unless there is something else at play ...

Ah, to me, when the top guy at the company sells, that is a telling thing. And, no, I have not forgotten how well DIS has done under his stewardship. I think it is called "pump-and-dump" ... No?

I've considered selling my stock (I'm 1,741,361st in total holdings). However, I think their movie lineup this year could help offset any damage done by P&R

 

[ParentsOf4]

I simply don't see them conceeding Fastpass entirely. It's a competitive advantage for them.

I agree but that's the point of earlier my post. TDO doesn't consider what's best for its "guests"; it considers what's best for itself. It's a short-sighted approach and is completely reversed from what it was in the 1970s, 1980s and for most of the 1990s.

At one time, WDW was the "Gold Standard" other service organizations measured themselves against. Disney constantly strove to exceed customer expectations.

Today, especially at WDW, Disney dances the Limbo: "How low can we go!"

 

[Lee]

Here's my question for those in-the-know:

Why was Baxter so hated in the halls of WDI?

"Hated" isn't the right word. At least not when speaking of the vast majority of WDI.

Tony did rub some people the wrong way. Some didn't like how he became a "celebrity" to the fans. They thought he got too close to what many in WDI call "foamers". (I don't agree. I think a certain connection between Imagineers and the people who are the biggest fans of their work is not only desirable, but necessary.)

He was also old school, in the sense that he designed attractions the way the first generation imagineers did. Big, immersive and (for lack of a better term) magic. He wasn't into interactivity and video screens and was a somewhat outspoken (in some circles) critic of NextGen. It was clear he was never going to get behind the "yes man", get with the program wave that is pervasive in Glendale.

Combine all that and in a climate full of poitics like WDI and you have an instant target on your back. Especially when you aren't totally on board with what the company bosses want and they know it.

 

[Figments Friend]

-
Lee sums it all up perfectly.

You go, boy.