Disney is going bankrupt!!!

[Travisma 1,317]

At least the article makes it sound that way.

 

Investors get concerned so the price of stock drops, even thought Star Wars is raking in major $$$

 

Disney stock down since 'Star Wars.' Here's why

 

 

 

The article explains it all...

 

There were a couple of nice pie charts but they wouldn't copy, so if you want to see them here's the link

 

http://www.usatoday.com/story/money/markets/2015/12/23/disney-stock-down-star-wars/77834078/

 

 

 

The Force is certainly with "Star Wars: The Force Awakens." But not so much with Walt Disney (DIS) stock.

"Star Wars: The Force Awakens" has been an epic victory in the theater. The firm broke opening weekend records with its $248 million box-office haul on the first weekend and is gunning for "Avatar," "Titanic" and "Jurassic World" to be the biggest global money-maker in history.

But Disney stock closed Wednesday down 5.8% - to $105.56 - since the release of the well-received film. Disney's stock is lagging the Standard & Poor's 500's 1.1% gain since "Star Wars'" release.

Understanding how a company can have a "Star Wars" sized hit product - and the stock still skids - teaches a number of enormous lessons for investors, including:

 

 

* "Star Wars" is a small part of the Disney empire. "Star Wars" is epic, it just not as epic as Walt Disney. Disney reported revenue of $48.8 billion over the past 12 months. That means "Star Wars'" first weekend of revenue is just 1% of Disney's total revenue over a year's time. Even if the film generates $1.95 billion in global revenue in the box office, as expected by Goldman Sachs, that would be just 4% of Disney's annual revenue.

 

* The film business doesn't drive Disney's business. There's no question Disney films generate characters, stories and buzz that filter through the rest of the Walt Disney business. But financially, Disney's film business is the third largest at the company. The filmed entertainment business accounted for 14% of Disney's revenue over the past 12 months, says S&P Capital IQ. The film portion of Disney's business ranks below Media Networks at 44% and Parks and Resorts at 31%. The small relative size of Disney's film business explains why every extra $100 million in "Star Wars" box office only adds 2 cents a share to Disney's fiscal 2016 earnings per share, says Goldman. Disney is expected to post an adjusted profit of $5.66 a share in fiscal 2016. 

 

* Parks and Resorts are powering the stock. Rising attendance, admission prices and expansion in the Parks and Resorts business is turning the business into the single-most important part of Disney to investors. Trefis estimates that 31% of the Disney's stock is attributable to the Parks & Resorts business - more than any another part of the business. Analysts are increasingly concerned about the long-term prospects of Disney's ESPN business - which is now attributable for 28% of the stock price, says Trefis.

 

* Disney stock is already up huge. Disney has been a massive winner - in part - because investors have already anticipated the company's ability to refresh the "Star Wars" franchise and maximize profits from all its franchises. Shares of Disney are up nearly 14% this year - while the Standard & Poor's 500 has been flat. The company's Parks and Resorts business has already added new "Star Wars" attractions to the parks and are building additions dedicated to the franchise. The consumer products unit has done the same.

 

So, what is hurting Disney's stock? So as big as "Star Wars" might be - it's not enough to undo a driving concern for investors: ESPN. ESPN is still the No. 1 source of the company's operating profit.  Even "Star Wars" can't make up for subscriber losses at ESPN  - a problem that is increasingly a problem as more consumers go for online streaming rather than cable TV, says BTIG analyst Richard Greenfield, who cut the stock to "sell" last week.

Despite the mounting worries about ESPN, though, most investors see the diversity of Disney's business units as a big plus. Analysts, on average, think Disney could be worth $119 a share in 18 months, which would be 13% upside from the current price.

 

There's much more life to "Star Wars: The Force Awakens," too. The film is expected to haul in $1.95 billion from the box office, says Goldman.

Disney is just getting started with this franchise. But the real Force is Disney itself.

 

Just the other day I saw an article that Disney made $5 Billion worldwide this year off of movie revenue, but I guess that's still not enough

 

[LONE-STAR 370]

When that much money is still not enough it's just sad.

[Retired and Happy (Ken) 101]

They have gotten enough money from us in the past couple of weeks to keep them afloat for a while.