Dan comments on Bob Iger and what he's been able to do at Disney and what he will continue to do.
Dan also discusses how big Disney is in the state of Florida.
Dan thinks there is room down towards $90 for the stock.
Dan also discusses how big Disney is in the state of Florida.
Dan thinks there is room down towards $90 for the stock.
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NewsTranscript
00:00 I've heard a lot of noise around Disney
00:02 for the last couple years.
00:03 And I think they were also, on some level,
00:06 really in the focus during the pandemic
00:08 because of what was going on with parks and whatnot.
00:10 And I think this is gonna blow over.
00:12 No one wants to hear my politics on this anyway,
00:14 so I'm just gonna point out that I think
00:16 this is a political issue,
00:18 and I think there are plenty of people
00:19 on both sides of the aisle that have a strong view,
00:22 but it does sound like that the view
00:23 is largely in favor of Disney on this one.
00:25 Again, my politics don't matter.
00:27 What I care more about is that the story around Disney
00:30 was gonna move this stock is really less
00:33 in the way of streaming losses, an asset mix,
00:35 maybe something strategic.
00:37 Are they gonna spin off ESPN, blah, blah, blah.
00:39 I mean, Bob Iger is the guy to handle
00:41 the next strategic step for this company.
00:43 And if you wanna, again, get back to the politics here,
00:46 Bob Chaypek was the guy that really
00:48 might have even started the politics,
00:50 or at least was responding to the politics
00:52 that were brought upon Disney,
00:53 depending on how you look at this.
00:54 So I'm gonna choose not to be investing in Disney
00:58 based upon the noise around this.
00:59 I think it's got the best assets,
01:01 certainly in the business,
01:03 I think the diversified business model.
01:04 The multiple here is not that attractive,
01:07 but I am a shareholder.
01:09 - You know, it's interesting, back in February,
01:10 when they reported their fiscal Q1,
01:12 you remember the stock had just had this massive run,
01:14 and then they put up this beat on the EPS.
01:17 They talked about costs.
01:18 It was one of Iger's first times
01:19 to really speak to the street again.
01:21 I know he's been doing that for decades here,
01:23 and the stock gapped up,
01:24 and then it closed on the low of the day,
01:27 and then went down like 20% from those opening highs.
01:30 So to Tim's point about valuation,
01:32 I mean, there's a lot of stuff that,
01:34 Bob Iger's gonna have a honeymoon period.
01:35 He's gonna be able to do a lot of things,
01:36 and I think, to Tim's point about this
01:38 kind of tit for tat with DeSantis,
01:40 I mean, if you had to ask me,
01:41 I'd bet on Bob Iger on this one, okay?
01:43 Like, Disney's been there for 100 years,
01:44 it's gonna be there for another 100 years,
01:46 and it really seems about a lot of culture war BS, you know?
01:50 Also, Disney, largest employer in Florida, to your point.
01:54 You know, it's not something that I think
01:56 is a winning issue if voters have to decide,
02:00 but to the point I would just say is like,
02:01 if there's some of the stuff that we're seeing
02:03 about the consumer, I don't think some of the stuff
02:05 we're seeing about streaming,
02:07 I don't think this is probably gonna be a great quarter
02:09 and a great guide when they report in a couple weeks,
02:12 and to me, the stock remains in a bit of a downtrend.
02:14 If shareholders like Tim think it's a bit of expensive,
02:17 when they just put up a great quarter last quarter
02:19 and they couldn't hold those gains,
02:21 to me, it probably seems like there's room down towards 90.
02:24 - It was Disney employees that brought the political fight
02:27 that demanded that Disney get into the political fight,
02:29 'cause Bob J. Peck's initial response
02:30 was to not wade into this potential morass,
02:34 and then because of the outrage expressed by the employees,
02:36 he said, you know what, we're gonna put a statement
02:38 against, out against this bill,
02:40 and so this really speaks to, and not to be political,
02:42 'cause this could be any political issue out there,
02:44 you know, if your constituents,
02:46 whether they be your shareholders or your employees,
02:48 demand that you take a social stand on something
02:50 or a political stand on something,
02:52 that can just invite risk to the company,
02:55 and how do you weigh that?
02:56 - That's the era we're in now.
02:58 I mean, we saw it initially with the US-China tensions,
03:01 more interventionist policies, economic policies
03:04 that were driven not just by a political goal,
03:07 but an economical, social goal,
03:10 and now we're seeing that play out through the pandemic
03:12 and now through ESG issues, not just at the national level,
03:16 but here we are on the state level,
03:18 and in the case of Florida, I mean,
03:19 they were given a gift in that people migrated there
03:22 in droves during the pandemic, they have low tax rates,
03:25 they have good geography,
03:26 they have all these things going for it
03:28 that benefit Disney as well,
03:30 but if DeSantis wants to keep attracting companies
03:33 to Florida, which is one of the top five states
03:35 in the country for GDP contribution,
03:38 he's gotta be careful how he steps through this,
03:40 because the last thing they want is a chilling effect,
03:42 and one last thing I'd say on Disney specifically,
03:44 you think about some of the benefits they get
03:46 from the Reedy Creek area, their ticket sales pre-COVID,
03:50 just the ticket sales revenue for taxes
03:53 was equal to the entire state's budget for elder care,
03:57 and that is a big chunk of their budget.
03:59 There's a few elderly folks down in Florida.
04:01 - Just a few. - A few,
04:02 who might care about that, for sure.
04:04 - Yeah, and I think this is gonna blow over,
04:06 which I think you used that term here,
04:07 because ultimately I think this is what DeSantis wants,
04:10 is it's in the news right now, we're talking about him,
04:12 he's all over the news, he's in this bid for presidency,
04:15 so I don't know how much this is gonna go,
04:16 but he wants the publicity, and what's bad with publicity
04:19 at the end of the day, and I think
04:20 that's what they're getting, but ultimately,
04:22 I think when you look at something like a Disney stock,
04:25 I think this news is gonna blow over,
04:26 I think it's selling off specifically on this,
04:28 I would not worry about that.
04:30 I do think it trades pretty expensive,
04:31 but I think over the longer term,
04:33 there's a lot of opportunity here,
04:34 especially Iger has just stepped into this role,
04:37 he's just starting to have some of those layoffs
04:38 to cut costs, but I think there's gonna be
04:40 wore down the line with him and I wouldn't put it past him.