Disney has always been a strong and common long term investment for many. It’s innovation and size makes it an attractive investment. But has this changed in recent months with the impact of coronavirus?
One aspect of Disney’s empire is not slowing down, and in fact making the most of the worldwide lockdowns currently in place, is the streaming service Disney+.
Assuming just under 50 million paying subscribers (as they still give away a lot of subscription through partnership deals) they are still in the shadow of the streaming experts Netflix, who currently command an impressive 167 million paying subscribers.
While considered a stable investment the virus has seen a share drop in value for Disney. Movies and other productions on hold, theme parks closed, holidays cancelled, and trying to cover the costs for all your employees when only a fraction are still functional.
Recently Disney were at a five year low. They have slightly improved passed that but this will be leaving many investors feeling like they have been taken the mickey.
But what do the numbers show?
Not the cartoon picture of happiness you might have hoped for.
The issue with such a large company is the value is normally less than the sum of it’s parts. This is why you see larger firms breaking into smaller focused chunks rather than remaining under a single large blanket.
This appears to be the case with Disney. Even with the extremely heavy discount (almost a five year low) Disney is still considered to be an expensive purchase with relatively lackluster future protections.
Is Disney simply too big to fail or even succeed? Is this a double edged sword of the slow giant heading where it wants? Are you backing Disney or would you rather be believing in fairies?