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The Walt Disney Company Message Board

  • quicktraderjoe quicktraderjoe Mar 9, 2010 1:43 PM Flag

    Disney

    Why isn't Disney up huge in the pass 2 days. Alice blew the box office big time. Alice and its up coming Disney movies will turn them into a +100 billions industry. HOLD!!!!!!

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    • Disney is trader's play area. They know the stock's cycles and use them. Disney's stock generally goes up just prior to any opening (movie, theme park or attraction, etc.), then gets sold off soon after. The stock is manipulated by those playing the market, which generally limits the benefits that actual INVESTING usually provides.

    • On a financial basis, no single movie can move Disney. Psychologically, a big movie can encourage some buying.

      Whatever pop the stock was going to get from the movie came last Thursday and Friday. And Disney took a huge move over those two days. People bought on the come. Jessica Reif Cohen's upgrade partially reflected the possibility of the movie being big.


      As far as the movie is concerned, you have to consider what the film cost to make and market including paying the stars and the star director. Disney spent $700,000 for just one ad on the front of the LA Times on the day the film opened. Yes, the film will be very profitable. But this film is not going to drive theme park attendance like a Pixar film does. And Disney consumer products refused to make a committment to produce and sell Alice related merchandise other than a few very high end items. Studio execs lost the battle with DCP head Andy Mooney and Dis CEO Bob Iger on that one.

      Also, keep in mind that John Lasseter does not like Tim Burton (they attended Cal Arts together) and John did not push for DCP to get behind the movie.

      The big buyers of the stock, the people who really make the stock go up and down, also look at the future prospects for media networks and theme parks, the segments of the company that have the most impact on its performance.

      Advertising has not recovered to pre-recession levels. Theme park performance has not either and is not likely to so long as unemployment remains high. Keep in mind that Disney is still heavily discounting its resorts.

      Dis is now in its natural trading range as a mature company. If it can stay in the low-30s until the recession ends, you could see a jump to the low 40s as year over year comparisons should be very good even though the revenue and OI numbers will be in the pre-recession neighborhood. But the gains will look like the company is growing, even though it is not.

      So, the real question for Disney growing is the economic recovery. If your crystal ball can tell you how that is going to play out, then you will know how Dis is going to play out.

 
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