Disney, Buy or Bust?

It has been said before, “The time to buy is when there is blood on the streets.”

Well were not quite at, the elevators in the shining opening up, but we are at The Amityville Horror when the walls are bleeding.

You may or may not be aware of the multitude of troublesome issues facing Disney currently, and that is for good reason. Disney is trying to distract you, the investor, from the issues pilling up around them. How? by announcing future projects to excite fans, although according to insider sources, some of these announced projects may be DOA or don’t even scripts written yet. Why have they done this? Because earnings are coming up. Bob Iger Disney CEO has a few years left on his contract to find a replacement and not end his long and storied position on a down note. Kathleen Kennedy head of Lucas Films contract is also ending and has stated that she wants to leave on a high note. See a pattern developing?

Marvel studios and Lucas Films have both seen diminishing returns on projects for the past several years. The costs on current projects are excessively high and the returns are lower and sometimes a loss.

Disney originally acquired Lucas Films for $4 Billion dollars and in the 12 years since it has produced 5 films, 5 live action shows and 6 animated shows. In that time it has either failed to make back its original investment or just barely. In an effort to fight off Nelson Peltz, Bob Iger shared a report highlighting the revenue of the films and merchandise. However he conveniently left out the ROI on the acquisition of Lucas Films. As CEO he of course has those numbers, however his reluctance to share them with investors or the public for that matter is extremely telling.

With diminishing returns on golden goose, Marvel Studios, and an unprofitable Lucas Films. Bob Iger has been looking to cut costs according to inside sources. This would be good news for investors if Disney had any projects on the horizons that looked to be a crowd pleaser or any plans, at all, about how to move forward in a constructive way.

Although most of Disney’s controversies have been happening behind closed doors so as not to spook the public or investors, some controversies are coming to light. Gina Carano, of the Mandalorian series is already in court suing Disney for wrongful termination. Elon Musk has financially backed her lawsuit so that she cannot be bullied or silenced by the Media Giant. Currently Threatening to sue Disney is Lesyle Headland and Amandla Stenburg of The Acolyte as well as Tatiana Maslany of She Hulk.

All of this is to say that Bob Iger has his hands full; controversies, lawsuits, culture war, costs, box office numbers, finding his replacement, finding the replacement of Kathleen Kennedy. The bigger the ship, the longer it takes to turn around. Bob Iger may be taking course corrective actions now, but it will take time to implement. it is conceivable that 2025 and even 2026 is a tough time for Disney. That my friends, and savvy investors, is the blood in the streets. I predict that the stock will be at it’s low and therefore a potential buy. BUT, the stock is only a buy if Bob Iger not only puts out the growing fires, but also implements a smart plan on how to move forward. Time will tell, maybe the golden age of Disney is truly over, or maybe, just maybe it will rise again. I will continue to watch with great interest as i have actively traded Disney stock for several years and may continue to do so.