Posted on 07/15/2023 12:00:00 PM PDT by workerbee
The Death Spiral. When companies enter it, I always go back to the legendary quote from Supreme Court Justice Potter Stewart (he was offering an opinion in a case regarding hard-core pornography): ''I know it when I see it."
I onboarded a new account this week, and one of the first things we did was dump Disney (DIS) . The client had some other long-term winners, and I let those go, but as far as DIS, I couldn't wait to dump that one and put it into one of my beloved preferreds, in this case we chose (PACWP) , PacWest's 7.75% preferreds, which are trading at over a 35% discount to par.
But why pick on Disney? As I read this morning's screaming headline on CNBC.com, "Wells Fargo says Disney shares to rally 60% with Iger's possible divestitures adding $10 a share," I chuckled as I saw DIS shares falling yet again today. In fairness, I didn't read the Wells Fargo report on DIS, although I have accounts with Wells and certainly could access that report, if I wanted to. But I don't want to. As a former sell-side analyst, I know all-too-well that many of them never "know it when they see it" until it is far, far too late.
The problem is that the Mouse House has an Elephant in the Room. We all know it. I am sure the Wells Fargo team does too, but it is just so obvious when looking at recent box office results. The phrase is a cute one, but also valuable for investors: Go Woke Go Broke.
I don't want to deliver a discourse on Disney's battle with Florida Governor Ron DeSantis over the (formerly) specially-legislated status of the land containing Disney World. I avoid politics whenever possible. But as a stock analyst, I never avoid articles like this one in the WSJ about a marked decline in attendance thus far in summer 2023 at Walt Disney World and Disneyland.
The economy is not great and things are still much more expensive than they were before the pandemic. Used cars have been a big downdraft in recent CPI reports, which has sparked Wall Street's "inflation is over" narrative, but airfares, the CPI constituent most relevant to Disney's theme parks, have actually been rising significantly in recent months.
I get all those things. But are people not taking summer vacations - if they weren't, airfares would be declining, not rising - or are they just choosing different destinations?
I believe it is the latter.
The answer is even more clear when it comes to Disney's filmed entertainment business. According to boxofficemojo.com, Disney only has three of the top 10 grossing films thus far in 2023, By all accounts Indiana Jones and the Dial of Destiny (I haven't seen it, although Raiders of the Lost Ark will always be one of my favorite films) has been a major box office flop.
Yet, Sound of Freedom, produced by 20th Century Fox in 2018 and then shelved by DIS after it bought its rival, has had an unprecedented box office run for an indie film. I have not seen that film, either, and I won't enter a discussion about its merits. That said, I am in South America now on a business trip for ExCap (Sound of Freedom was mostly filmed in Cartagena, Colombia) and I know that human trafficking is a major concern on this continent. That's all I will say. I will avoid third rails.
But how on earth did Disney leave a movie that will end up grossing $100 million domestically (it has already grossed $53.9mm heading into this weekend, according to boxofficemojo.com) "in the can " for years, before finally sloughing it off on movie upstart Angel Studios?
Simply put: Disney's management decisions have turned people off. The brand is damaged. I know it when I see it, and thus I dumped DIS, which hasn't declared a common dividend since 4Q19, as soon as I saw it in this new client's account.
Will Bob Iger reverse that? By going on CNBC and intimating that ESPN is for sale, as Iger did earlier this week? Not likely. By "divesting" assets that would "add $10/share" (which would only add 11% to DIS value), according to the report this morning from WFC's analyst? No. If Disney were to become a seller, as Iger hinted, then Disney would own less (or control less, if a joint venture were the preferred structure for dumping ESPN) content.
And that content, seemingly, is the one valuable thing that Disney has. No one else owns Mickey Mouse, Donald Duck, Princess Leia or Buzz Lightyear. Or even Indiana Jones. But Disney, as I mentioned in my prior Real Money column on the name, has found an extraordinarily effective way of offsetting the goodwill created by these characters.
Disney's brand is decaying. I know it when I see it. So does anyone with access to stock quotes. I just don't see Bob Iger reversing the Death Spiral. Continue to avoid DIS.
the Death Spiral
Deserved and to be expected. Truth be told, without Disney, Florida will be better off without, in the long term.
it’s called....take the money and run...
Disney is boring. Mickey Mouse, Donald Duck, Princess Leia, Buzz Lightyear and Indiana Jones were sort of interesting in 1995. Walt started with railroading and Disney should focus on that.
Disney could make billions taking stories in the public domain (fairy tales, folk tales etc.) and turning them into animated movies. Just skip all the woke crap and tell the original tale.
When Intel P6 design engineers discovered the P5 floating point flaw, there was an internal effort to cover it up by a couple of marketing managers who were in danger of loosing their stock options.
Andy Grove began to ask questions of validation and design engineers and even though it was going to be expensive, they decided to fix the hardware.
It took them about a month to come to the correct decision.
Disney did this to themselves after decades of embracing the gay mafia and rejecting their customers.
They have a couple more weeks to pull this out of the fire or its going to go very badly.
And lovin it!
It appears that everything Disney is being affected-couldn’t happen to a nicer bunch. When hubby and I would visit my cousins in Florida-in the early 80’s taking the cub to Disney was always a big deal-you couldn’t pay me to take a kid there now...
I did buy new collars for my 4 cats-I got Disney ones-they were marked way down at Chewy-but I wouldn’t have bought them at the regular price instead of the cheaper brand...
I would compare Disney to RNC Treasurer Ed Brennan’s Sears.
Ed ran the RNC like he did Sears. Disney types are the current Ed Brennans of the Democrat party.
Both Sears and Disney have many parts. Sears sold parts. Parts is parts.
The question arises what parts of Disney have value in the eyes of the buyers and and what buyers are unrealistic about the parts they buy. What buyers see the opportunity to repurpose the Disney asset for some 2030 fad?
“Disney CEO responds to claims that the company is sexualizing children: ‘Preposterous and inaccurate’” https://freerepublic.com/focus/f-news/4167620/posts
https://freerepublic.com/focus/f-chat/4167098/posts
‘Insulting’: Disney+ invents person’s homosexuality in famous true story
https://freerepublic.com/focus/f-news/4161910/posts
Disney’s New Ultra-Woke Kids Movie Featuring ‘Nonbinary’ Character Bombs at the Box Office
https://freerepublic.com/focus/f-news/4160901/posts
These Disney characters are set to appear at Disneyland’s first-ever After Dark Pride event
https://freerepublic.com/focus/f-backroom/4159901/posts
Disney brings ‘Pride’ to Seattle Men’s Chorus
https://freerepublic.com/focus/f-chat/4156161/posts
Disney mocked for ‘woke-a-thon’ $250M Little Mermaid live-action reboot: with ‘drag queen’ Ursula, King Triton the environmentalist, mixed-race mermen, and ‘affirmative consent’ slipped into prince’s love song
https://freerepublic.com/focus/f-news/4154576/posts
Disney partners with PRIDE to develop content for children
https://freerepublic.com/focus/f-news/4147870/posts
Check Out Disney’s New Rainbow Collection in Honor of Pride Month
https://freerepublic.com/focus/f-chat/4144881/posts
New Disney show focuses on teen-girl sex with Satan
https://freerepublic.com/focus/f-news/4131543/posts
Gay chorus that sang about converting kids into LGBT cult partners with Disney for PRIDE concert
https://freerepublic.com/focus/f-news/4130372/posts
Thought your children’s TV cartoons were innocent and fun? CJ PEARSON exposes how Disney is using them to brainwash your kids with woke, offensive nonsense - and insists: For their sake, it’s time to fight back
https://freerepublic.com/focus/f-news/4129193/posts
Disney still going all in on woke
https://freerepublic.com/focus/f-chat/4129046/posts
Disney’s ‘Proud Family: Louder and Prouder’ Advances Racial Division To Children After Previously Pushing ‘Not So Secret’ Gay Agenda
https://freerepublic.com/focus/f-chat/4128587/posts
Disney-Affiliated Drag Queen Welcomes Children to Show Featuring Simulated Sex And Nudity
https://freerepublic.com/focus/f-chat/4113884/posts
Bob Iger Confirms Disney Will Double Down On Woke Content: “We Can’t Lose That, We Just Can’t”
https://freerepublic.com/focus/f-bloggers/4112785/posts
Disney Loses $100 Million on Its Latest Flop Promoting Gay Teen Romance
https://freerepublic.com/focus/f-news/4112627/posts
Disney CEO Pledges To Double Down On LGBT ‘Storytelling’ In Animated Kids’ Movies
https://freerepublic.com/focus/f-news/4090582/posts
In a move that seems a stretch even for a leftist corporation that openly promotes LGBT agenda points and links itself to the body mutilations of young children through transgender ideology, this new “cartoon” from Disney features a little girl “Antichrist.”
https://freerepublic.com/focus/f-chat/4086275/posts
Disney Set to Push More LGBTQ Propaganda on Children
https://freerepublic.com/focus/f-chat/4085676/posts
Double-Extra Woke: Disney Casts Trans, ‘Non-Binary’ Actress in Marvel’s ‘Ironheart’ After Casting Drag Queen
https://freerepublic.com/focus/f-chat/4082734/posts
Disney’s Woke Agenda Continues- First Out Trans Character Will Debut on The Disney Channel
https://freerepublic.com/focus/f-chat/4076710/posts
Natalie Portman Loves that Disney’s ‘Thor 4’ Is ‘Gayest’ Marvel Movie Ever
https://freerepublic.com/focus/f-news/4075460/posts
“Baymax!”, the new kids’ show streaming on Disney+, features a transgender man who buys tampons at a supermarket.
https://freerepublic.com/focus/f-chat/4074956/posts
Disney Animated Children’s Series ‘Baymax’ Features Transgender ‘Man’ Who Menstruates
https://freerepublic.com/focus/f-chat/4072608/posts
Disney’s Lightyear FLOPS in opening weekend after lesbian kiss controversy
https://freerepublic.com/focus/f-news/4069453/posts
Disney Doubles Down On LGBTQ Programming With ‘Lightyear’ And More
https://freerepublic.com/focus/f-chat/4066528/posts
Watch: Disney Used Pride Special to Encourage Children to Support Gay, Transgender Group GLSEN
https://freerepublic.com/focus/f-chat/4065025/posts
Disney Releases LGBTQ Pride-Themed Toys Marketed to Children
https://freerepublic.com/focus/f-chat/4064758/posts
Disney Launches LGBTQ Clothing Line for Children and Older, Donating Profits to LGBTQ Groups
https://freerepublic.com/focus/f-news/4056730/posts
The Mouse that Whored-Disney sets a trap for children
https://freerepublic.com/focus/f-news/4054973/posts
‘Gayest kids movie yet’ from Disney unleashed on America Supporters gush: ‘Gloriously queer-positive’ with ‘not a moment censored’
https://freerepublic.com/focus/f-news/4054340/posts
Disney to air ad accusing Americans who oppose genital mutilation of kids of wanting to ‘tear families apart’
https://freerepublic.com/focus/f-news/4051842/posts
Disney Executives Admit: Of Course We’re Grooming Your Children: Multiple Disney employees admitted their own personal missions to deluge 5- to 9-year-olds with as much of their own sexual ideology as possible.
Disney isn’t just grooming children with radical sexual propaganda — now they’re bragging about it.
On the heels of Florida’s new Parental Rights in Education law, which bars educators from instructing kindergarten through third-grade students about sexual ideology, multiple executives and employees from the Walt Disney Company admitted their own personal missions to deluge 5- to 9-year-olds with as much of their own sexual ideology as possible.
One Disney executive boasted about her “not-at-all-secret gay agenda” and efforts at “adding queerness to” children’s programming, in leaked audio published by investigative journalist Chris Rufo on Tuesday.
“Our leadership over there has been so welcoming to my, like, not-at-all-secret gay agenda,” said Latoya Raveneau, an executive producer for Disney Television Animation. “I was just, wherever I could, just basically adding queerness … No one would stop me and no one was trying to stop me.”
“Disney CEO responds to claims that the company is sexualizing children: ‘Preposterous and inaccurate’”
Bob and the rest of the Pedos are on a roll.
Amen.
They’ve goto go with Iger for now. Chapel was an unmitigated disaster.
Iger greased the skids.
There are creative people out there coming up with new concepts and stories. They can even do "diversity" with a bit of an amusing twist. These people will not work for Disney.
Disney cheats it's artists. There is no need for them to do so and they do it in petty, slimy ways. The kind of thing you would expect from two bit hustlers who shoot movies in dilapidated building they rent on a month to month basis.
So they are left with the uncreative.
They deserve everything that is coming to them.
Unfortunately, the decline is not going to happen as quickly as we would like. Disney is into a LOT of stuff.
You can blow up the picture to read the companies.
https://www.titlemax.com/discovery-center/money-finance/companies-disney-owns-worldwide/
Ever since Disney announced they’re coming for our children.
The last 4 ceos from Michael Eisner on have lined their pockets with hundreds of millions. Iger salary in 2022 was $27 million.
And the unhinged activist community within Disney is so large/central that they simply can’t comprehend fixing this stuff. The business side does not appear that it would be allowed to fix things even if it were so inclined.
And the unhinged activist community within Disney is so large/central that they simply can’t comprehend fixing this stuff. The business side does not appear that it would be allowed to fix things even if it were so inclined.
That means nothing. If the losses keep mounting the board will have to do something and most all of this is Iger’s doing anyway.
That is BS, they can’t keep that up even if they wanted to. Who knows Blackrock might be built on a house of cards financially themselves.
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