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Walt Disney Company fourth quarter 2020 financial results to be released mid-November
Company executives will discuss the Q4 and full year earning in a call on November 12.
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Last quarter was a wash with all the parks and theaters closed. They didn't touch a dime of reserves.If they end the quarter in a loss, which is being predicted by many analysts right now given how Mulan and The New Mutants are being seen as Lone Ranger-level bombs, then it puts to bed the thought that Disney is "recovering" to investors and lead to activist investors taking over and forcing more job cuts (and possible spin-offs) just to get back to profitability ASAP. To hell with long-term strategy, they'll say.
If not that, then there's gonna be calls by investors to close the parks again just to keep the cash reserves from reaching zero. Heck we aren't even sure if Disneyland Paris will stay open by November.
Depends on how long a recovery would take. 2, 3, or maybe even 5 years from now sure they can be back up to pre-pandemic levels.With a stimulus deal all but dead pre-election, guaranteeing even more layoffs (I'd be shocked if the number of firings isn't 75,000-80,000), and guaranteed movie theater defaults by December, you have to be insane or detached from reality to think Disney will go back to making more than $65 billion in revenue each year once this thing ends.
75-80K layoffs would 90-95% of the workforce. Disney would sell the theme parks to a buyer before that idea ever happens.With a stimulus deal all but dead pre-election, guaranteeing even more layoffs (I'd be shocked if the number of firings isn't 75,000-80,000), and guaranteed movie theater defaults by December, you have to be insane or detached from reality to think Disney will go back to making more than $65 billion in revenue each year once this thing ends.
By then activist investors would've seized control of the company and broken it up into pieces, throwing Disney's long-term strategy into the grave. This is exactly what happened to Time Warner before the AT&T sale (remember when it had a cable company, publishing firm, internet company and a music enterprise?), and if it weren't for that then HBO would've been spun-off up next.Depends on how long a recovery would take. 2, 3, or maybe even 5 years from now sure they can be back up to pre-pandemic levels.
I'm talking company-wide.75-80K layoffs would 90-95% of the workforce. Disney would sell the theme parks to a buyer before that idea ever happens.
I'm not going to say it'll "never happen", but I'll say I don't see that happening. There is more value in keeping the company whole and riding it out, but YMMV.By then activist investors would've seized control of the company and broken it up into pieces, throwing Disney's long-term strategy into the grave. This is exactly what happened to Time Warner before the AT&T sale (remember when it had a cable company, publishing firm, internet company and a music enterprise?), and if it weren't for that then HBO would've been spun-off up next.
Thanks for posting an article by someone who puts "Contrarian" in their own byline. It helps to identify the outliers.![]()
Disney: 2 Major Problems With The Bulls' Thesis (NYSE:DIS)
As excitement around Disney's DTC business grows, so is the company's valuation which is still near all-time highs.seekingalpha.com
As I was saying.....
Stay tuned. He's gonna force spin-offs next.
“We understand that a more aggressive investment strategy may pressure short-term earnings on the path to creating long-term value,” Loeb writes. “Lest there be reservation about making such a trade-off and any potential shareholder concerns, we highlight an observation from Warren Buffet: ‘companies get the shareholders they deserve.’ Disney deserves growth-minded, long-term oriented investors, and we believe that a strategy centered around using Disney’s many resources to drive growth in the DTC business will further attract them.”
The problem with that is that once institutional investors dump the stock knowing they won't get their dividend anytime soon, hedge funds will fill in the void and force spin-offs anyway.Um, that is not what is happening:
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Activist Investor Dan Loeb Urges Disney to Skip Dividend to Invest in Streaming Content
Activist investor Dan Loeb is urging Disney to halt its dividend and spend more money on Disney Plus.variety.com
“We understand that a more aggressive investment strategy may pressure short-term earnings on the path to creating long-term value,” Loeb writes. “Lest there be reservation about making such a trade-off and any potential shareholder concerns, we highlight an observation from Warren Buffet: ‘companies get the shareholders they deserve.’ Disney deserves growth-minded, long-term oriented investors, and we believe that a strategy centered around using Disney’s many resources to drive growth in the DTC business will further attract them.”
That is not a statement of an investor looking for Disney to start spinning off business units any time soon. That is an investor asking Disney to use all their resources to drive growth in their Direct-to-Consumer divisions.
Except you claimed HE would be the one to do it, which is clearly not the case. As for other hedge funds doing it, agree to disagree.The problem with that is that once institutional investors dump the stock knowing they won't get their dividend anytime soon, hedge funds will fill in the void and force spin-offs anyway.
Notice how he explicitly calls on the company to move more blockbusters to streaming. There's no way that's not a call to spin-off the theatrical distribution business.
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