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Thread: Declining Stock

  1. #1

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    Declining Stock

    Disney stock as been on a slow, steady slide lately. Any thoughts?
    "Yesterday, a man walked up to me and said, 'Isn't it a shame that Walt Disney couldn't be here to see this?' and I said, "He did see this, that's why it's here."
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  2. #2

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    Re: Declining Stock

    I disagree. In the past couple of hours, it has been up



    Seriously though, I don't own Disney stock because it has not been a good investment for a while.
    I need to get a life...

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    Re: Declining Stock

    In the past couple of hours, yes. Over the course of 2005 it's been up and down... with a net down. The 52-week high was $29. The 52-week low was $22. At this moment, it's at $24.90.
    "Yesterday, a man walked up to me and said, 'Isn't it a shame that Walt Disney couldn't be here to see this?' and I said, "He did see this, that's why it's here."
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    Re: Declining Stock

    No idea. Could be the Pixar unknowns. Could be the general economic outlook.
    Big picture overview: investors are putting their money elsewhere instead of DIS. It's possible that other companies have become relatively more attractive, expected-return-wise. Doesn't mean that the investors are right. At this moment, one share of DIS stock is worth $24.83. At this moment, no one knows for sure which way the price will go. (If they did, they'd buy as much as possible, then sell when they were sure the price will fall.)
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    Re: Declining Stock

    I think investors are reflecting the current state of Disney. Let's face it, their resent movie business has been poor. There is no animation done at Disney any more. They even stupidly put their reputations on the line for that mediocre import, Valiant. The real success in the market has been Pixar. But there is no Pixar deal. In addition, DVD sales are down because of piracy, both at home and abroad.

    Now Katrina will depress southern vacationers from driving to WDW for the last part of this year because of high gas prices and exhaustion. Next year, during hurricane season, I am sure it will be harder to fill hotels.

    Over all, Disney needs some magic of its own to really take off. There is no major initiative or expansion (except for HK Disneyland and that looks like it might be like Euro Disney!) I think to investors it looks like Disney is on curse control.
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    Re: Declining Stock

    Maybe they got to big with to many parks

  7. #7

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    Re: Declining Stock

    Well the simple answer Tom is that there aren't enough good reasons to buy Disney at the moment... Of course there aren't enough good reasons to sell either... so it is still hovering around 26 dollars a share and will likely stay there untill either Pixar inks a deal with Disney or Chicken Little or Narnia is a HUGE success... (I am not betting on Chicken Little, but my money is on Narnia... Then I think you will see movement on the stock...)

    I really hoped that there would be a culture change in the Corporate Offices... So far, I am not seeing it... Restructuring Stratigic Planning helps but it doesn't go deep enough into the philosophy that has become inbred at Corporate Managment... It seems that the company's moves are often so conservative that they still value "Margins" over "Magic"... This is not Disney... It produces thinks like DCA, Bambi 2, Valiant, and other pieces of work that undercut the value of the Disney Brand...

    I think there would be more movement in the stock if it valued "Magic" more than "Margins." It doesn't mean that making a profit is not important... It means that the company values creativity, innovation, and excellence. From these ideals comes the "margin." Right now Disney is not the cutting edge of much of anything, except maybe sports entertainment... (A concept that I find Ironic.)

    Piracy is just a scape goat, because it underminds the "Singles and Doubles" philosophy... Which means your margin base is so thin, any kind of piracy threatens production costs... Lowering the costs cuts the quality of the film... Making the film easier to copy, and often less appealing to a mass audiance...

    The trouble is that when you market the heck out of these products the artistry that goes into creating these "Treasures" becomes less and less valuable... That is what we have been seeing over the last couple years with Animation, Films, and Theme Parks... It is bleeding over to TV and Cable as well...

    In the end, I think it will be creativity and inovation that will drag Disney out of the rut it is in... But is Iger the man to lead this kind of innovation... I don't think so, it just perpetuates the comfortable status quo... and the last couple of years has proven that the status quo isn't good enough...
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    Re: Declining Stock

    Most entertainment offerings take a big hit after a natural distaster like Katrina. With gas prices, airline turmoil and what-not, I'm suprised that DIS is as resilient as it is.
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    Re: Declining Stock

    Another way to look at it is like this...

    Upper Management does as it is currently structured is dissinclined to take risks...

    Going with Iger is only marginly better, because though he has less stock in Disney than Eisner... Iger has plenty so that if he shows modest gains, he will make a profit... Eisner picked him, because he wants to make certain that his stock will not lose value, rather than make bigger gains...

    So marginal amount of growth reaps a greater benifit than someone who is newer and who has fewer shares. They would be more inclined to take more risks...

    The more risks a company takes often the bigger the stock gain or loss... Creativity, innovation, and imagination involve financial risks, and often more financial creativity - sinergy... Which is why Walt and Roy had a hard go trying to get funding from time to time...
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    Re: Declining Stock

    I beleive the stagnation in stock price comes from a broad economic outlook. Although its price is slowly heading downward there has not been the rapid decline like in rival studio dreamworks, whos box office reciepts outweigh disneys (in regards to animated features this year) If both are down i tend to think there more at play than internal corporate boardroom dissensions and politics. although, these factors do not help the matter. i dont see disney gaining and sustaining significant growth till well after iger takes over. and only if he can prove (in an up-hill battle) that he isnt the tyrant of an apprentice that his master was. those who own disney stock, for the most part, i feel, have a emotional attachment that preceeds monetary gain. as soon as mgnmt recognizes this and corrects its cheapening out-sourcing, sequel type behaviors those who own the stock will be inclined to buy more. the stock is cheap because they company produces cheap products. when the value of production increases so will stock price and shareholder confidence.

    This isnt rocket science and i know these people have degrees so i dont understand why this is so hard to understnad?

    sure during a transistion from cheap to quality attractions, movies, shows, products, etc. there might be a few quarters of loss. however i feel a temp lose now will enableus to more than make up for it in the future. the way the company stands now is in a downward spiral. the misguided or inflated profits made today on sub-standard output puts a strain on mgnmt to always make these types of profits forcing more costs cuts and more severe declines in quality. if this cycle continues the company, its stock, capital, employees and reputation will be worth little to none and will likey go the way of other wayward entertainment conglomerates. wise spending and perhaps some divestitures will help focus the company on its grass roots enabling it to become one americas great companys again. the company walt and roy built!
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  11. #11

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    Thumbs down Re: Declining Stock

    Quote Originally Posted by WRDup
    ... the way the company stands now is in a downward spiral. the misguided or inflated profits made today on sub-standard output puts a strain on mgnmt to always make these types of profits forcing more costs cuts and more severe declines in quality. if this cycle continues the company, its stock, capital, employees and reputation will be worth little to none and will likey go the way of other wayward entertainment conglomerates.
    From everything I'm hearing, this "cycle" will continue, for quite some time to come. The studios have plenty of projects on their plates, and four films for FY06 are expected to do boffo at the box (Chicken Little, Narnia, Cars, and second Pirates). However, nothing major is slated for WDW after Everest opens next spring, and ditto for DL. Most of the non-Asian park capital will be spent "fixing" DCA and WDS Paris. The focus has clearly shifted onto HKDL and the new Shanghai park, which won't even begin groundbreaking for at least three more years.

    China is where it's at now, for virtually everything Disney produces. This is where the bulk of the company's future profits will be coming from, according to Iger. Whether or not that actually plays out, remains to be seen. But clearly, Asia is a huge untapped market for Disney; I can't blame them for shifting their focus away from domestic growth, which is going to be much more difficult to achieve, in such saturated markets. And until Asia can produce those much sought after profits, we'll probably see the stock price continue to languish.

    I don't expect Disney stock to increase appreciably, for at least several more years.

  12. #12

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    Re: Declining Stock

    I got my first stock in 1991 when I graduated college as a gift. It did a 2 way split so then I had 3 shares. Then when the stocks were around $25-ish a share I bought a bunch, which was gosh, 5 or 6 years ago to where I now have almost 50 shares. Not much but its fun to have. Unfortunately I haven't seen it much higher than $29 since then and that was probably for only a couple days.

    I know its not just the Disney stock that isn't doing that great, it's the whole market of course. I sure miss the good ole days when it was hovering around $100 a share.

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    Re: Declining Stock

    I for one am not confident about Chicken Little as being a francise that is even remotely close to what Pixar handed over to Disney on a silver platter...

    From viewing the trailer for Chicken Little, I don't see a significant shift in Disney Directed animation from 2D to CGI... The plan seems to calls for story writers to write around marketable characters... Characters they are pushing in the marketing, but I really don't see a compelling story line... Yet it is the story line that brings people to want to watch a film over and over again...

    I mean, this is a real cause for concern... I am tired of watching animation that has a storyline that comes from the demands of consumer products to produce marketable characters... It should be the other way around... Didn't they learn anything from Girgie and the Black Cauldron?

    OK, I am hopping off my soap box here... I hope I am wrong, but I doubt it...

    Narnia is going to be HUGE... Why? Because the story is there...
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    Re: Declining Stock

    ...but I like Gurgie


    I agree though... films made by committee are so much factory-produced dreck, and really the box office sees enough of this. I've noticed that the film industry is feeling the pains of their own bad behavior now. The cost of seeing a film has risen to around $10, and people just aren't willing to shell out that much (assume two people going together, now you've spent $20 before taxes or popcorn!) on a movie they aren't guaranteed to like - not when they can hold out a few months and get the dvd for $15. If the industry as a whole (and you just know this is never going to happen, but if theoretically they did) would cut back prices to, say, $6 or $7 per person as the regular ticket price, people wouldn't be so stingy with their entertainment dollar.

    Anyway, we all know that's never going to happen, SO... it's up to the industry to start producing better-quality films. Only we know that's never going to happen, because they won't take the financial risk.

    Perhaps it's time to let the old "studio system" come back?

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    Re: Declining Stock

    Quote Originally Posted by Morrigoon
    ...but I like Gurgie


    I do too, but it was the marketablity of that character in the Allexander books that made the film really...

    Perhaps it's time to let the old "studio system" come back?
    All it takes is one company to take the risk and earn a bucket load of money. The rest will follow... Trust me...

    To reduce the risk such a studeo would initially be "smallish." But I think it could happen...
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