Today, December 3rd, at 1PM Eastern/10AM Pacific, the Walt Disney Co stock NYSE: DIS, hit $154.14 a share, the second highest the stock has been in the company’s history, missing the record by a few cents.
After seeing the steepest drop in the company’s history earlier this year, due to Covid-19, the company has worked hard to put itself in a position to remain financially solvent and to weather a storm that has wiped out or severely hobbled many in the entertainment industry.
It has become standard operating procedure among Disney fans to denigrate and chastise executives for the company. Since the criticisms are seen as “punching up,’ it has always been accepted and expected. It gives fans a scapegoat for their anger and causes little harm since CEOs and Chairpersons will never see or hear these complaints. However, credit must be given when credit is due, and in this case, credit is due to Disney CEO Bob Chapek, Disney CFO Christine McCarthy, and Disney Executive Chairman Bob Iger, along with their respective teams.
The executives atop Disney has made some very unpopular decisions in terms of furloughs and layoffs, but they’ve managed to keep the company afloat among an unprecedented period of uncertainty and financial loss.
It might seem weird to some to see Disney announcing further layoffs into Q1 of 2021 at the same time their stock is hitting near all-time highs. The explanation for this is complex, but it can be boiled down to the simple principle that a company’s stock price is a reflection of the investment community’s perceived future strength of a company. While layoff decisions are made due to the current, present-day financial situation of a company.
To make it even more simple, Disney is getting crushed in their Parks division (which includes cruises, resorts, etc.) with half of their parks closed down. Because of this they have decided to lay off cast members to cut their costs since they are not receiving any income from these properties. They’ve also decided to cut and delay many projects. So their current, present-day situation is not great.
However, they’ve been able to maintain a strong brand during these times, their streaming service is shattering expectations, they have plenty of cash on hand, and there are real signs that their parks, experiences, and products division will be just as popular, or even more popular, once we’ve moved through this pandemic. Because of this, investors see Disney’s future as very positive and that is sending Disney’s stock to record highs.
We here at the The DisInsider have reported extensively on the cast member layoffs and we are in no way trying to diminish the pain they have caused. They’ve put thousands in horrible positions, forcing many of Disney’s finest employees to make difficult and life changing decisions. However, for those hoping to one day get their old job back, the news of the company’s stock price soaring should give you hope. Any sign that Disney’s future is bright should be a welcome sign for those who dream of working for the company again.
As long as we continue to get positive vaccine news, the rollout sees no major setbacks, and the public is receptive and actually voluntarily receive the vaccine, the Disney parks, cruises, retail, and other themed experiences, will likely be back to the way they were one year ago and potentially could reach even greater heights.
Legal Note: this article is not intended to provide any investment advice, it provides no forecasts, and makes no guarantees. The purpose of the article is to explain what is happening with the current status of the Walt Disney stock. No one should make any financial decisions based on any actual or perceived suggestions contained in this article. Anyone seeking to make an investment decision should seek counsel from investment professionals and financial experts.