Walt Disney Company fourth quarter 2020 financial results to be released mid-November

Slpy3270

Well-Known Member
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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.
 

MisterPenguin

President of Animal Kingdom
Premium Member
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.
Last quarter was a wash with all the parks and theaters closed. They didn't touch a dime of reserves.

This quarter had parks partially open, at a level that was operationally profitable (however small that profit may be).

And D+ is doing better than expected. Mandalorian and WandaVision will only accelerate growth.

And sports is (mostly) back.

And linear TV, which was profitable last quarter and the reason the quarter wasn't a net loss, has been back in production.

So, a net loss is very unlikely.
 

tirian

Well-Known Member
Rescheduled to make time for the spin room and the book kitchen. Let’s see how many people buy the corporate PR after 28k layoffs. (One bad year due to Covid certainly doesn’t mean they’re going out of business, which they’re not.)
 

Slpy3270

Well-Known Member
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.
 

Disney Irish

Well-Known Member
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.
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.
 

Lilofan

Well-Known Member
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.
 

Slpy3270

Well-Known Member
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.
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.

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 talking company-wide.
 

Disney Irish

Well-Known Member
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.
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.
 

Disney Irish

Well-Known Member
As I was saying.....

Stay tuned. He's gonna force spin-offs next.
Um, that is not what is happening:


“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.
 

Slpy3270

Well-Known Member
Um, that is not what is happening:


“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.
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, and doesn't mention anything about the media networks and theme parks. There's no way that's not a call to spin-off those businesses. If Chapek and Iger make it clear they aren't getting rid of those businesses, the stock will get pounded again because that's what investors were betting on.
 

Disney Irish

Well-Known Member
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.
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.

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.

What exact assets are you claiming here? Because those same assets while may face cuts in the short term in the transition to streaming are just as valuable to streaming as the theatrical distribution. Also no where does he indicate that Disney should give up on the theatrical model completely. Just that Disney should invest more into streaming.
 

MisterPenguin

President of Animal Kingdom
Premium Member
While waiting for the call to start today, some background reading:



The following is an organization chart. You have to sign in with an account, which is free to make. Also, one could use a dummy email....

 

MisterPenguin

President of Animal Kingdom
Premium Member

brb1006

Well-Known Member
Since it's almost December, here's a thread for "Disney's Investor Day 2020" which is scheduled for December 10th, 2020. Where more information is Disney+ is planned to be discussed.
 

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