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- Attractive Industry of Entertainment: Disney
Attractive Industry of Entertainment: Disney
Disney stocks are trading 50% off their peaks. The company has vastly diversified its portfolio with thematic entertainment parks, cinema and television studios, along with the streaming platform to allow (D2C) direct customer interaction. Disney owns a lot of successful brands like Mickey Mouse, Star Wars, Avengers, and many others.
The company is heavily investing in its streaming service Disney+ which is mostly posting losses now. Its operational margin is at -14%, while Netflix has a positive one at 15.5%. Direct content distribution via its own streaming platform without any third party is expected to bring it lots of money in the future. But for now, things are not going as expected with the situation not getting better.
Bob Iger, Disney’s newly returned CEO, has announced massive restructuring of company’s business. The company will be divided in seven departments, costs will be cut by $5.5 billion with staff cuts by 7,000 people (3% of the overall number of employees). Mr Iger was Disney’s CEO before 2020 and made several successful acquisitions including Pixar, Lucasfilm, and Marvel Entertainment.
Disney’s success story has lasted for quite a while and will hardly turn to a horror story in the foreseeable future, but this doesn’t meant that this is a reason for complacency. Disney stocks may continue to tumble towards their lows at $80, amid a general market correction. This would be quite an attractive level to add this stock to the investment portfolio.
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