Category: Disney Financials

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Saudi Arabia Investment Fund Buys 5 Million Shares in Disney Stocks

Investment Fund

A Saudi Arabian wealth fund revealed in a SEC filing how they’ve been pursuing the purchase of U.S. investments. The Securities and Exchange Commission showed how Saudi Arabia’s Pubic Investment Fund recently purchased more than 5 million shares of stock in the Walt Disney Company for under $500 million.

To put it in perspective, even though it’s a substantial dollar amount, the 5 million shares are less than a fraction of a percent of the company’s total shares. The wealth fund has lately been seeking investments in U.S. sports and entertainment companies. According to a SEC filing, the investment entity recently bought more than 12.3 million shares of Live Nation’s stock, which now gives them a 5.7% stake in the entertainment company.

The Public Investment Fund (PIF) also bought shares in several other major companies. For instance, they bought shares of Berkshire Hathaway, Starbucks, Back of America, and Facebook. The PIF controls more than $300 billion in assets and is led by Crown Prince Mohammed bin Salman. Today, the fund’s portfolio totals more than $10 billion in U.S. holdings.

Due to the COVID-19 pandemic, companies such as Disney have been accumulating debt since they were unable to operate their routine business functions. From a debt perspective, acquiring new investors helps them leverage the debt with new equity.

Source: The Wrap

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Disney Financials Disney Parks Other

Saudi Arabia’s Investment Fund Buys Five Million Shares in The Walt Disney Company

Disney theme parks around the world have been closed for months. Shanghai Disneyland recently broke the theme park stand-still by re-opening, but Disney has not yet announced when the rest of the parks will re-open.

Shanghai Disneyland

In the wake of the closures, The Walt Disney Company furloughed employees and has been taking on debt to protect its financial future. Analysts recommended accepting equity agreements instead of additional lines of credit and Saudi Arabia’s public investment fund just offered Disney this opportunity.

Disney recently estimated a revenue loss of close to $1 billion due to the closures, and last week the company took on additional loans totaling $11 billion dollars.

According to the Hollywood Reporter, analysts advise companies impacted by the closures, like Disney and AMC, to accept investments over cashing out more loans.

AMC Theater in Disney Springs

Moody’s analyst Neil Begley stated “It would be a welcome investment from a debt perspective to see some of these companies that are more dramatically affected bring in some equity rather than just bringing [on] lots of debt, particularly some of the larger-cap media names like Disney and ViacomCBS.”

Expedition Everest at Animal Kingdom

He went on to say, “I just can’t say whether or not the folks at Disney would be willing to entertain issuing equity at this juncture. But for some of these companies that have an uncertain horizon at this time, it certainly would be prudent, particularly for their credit ratings.”

Disney World Monorail

Saudi Arabia’s sovereign wealth fund, named the Public Investment Fund, recently shared their acquisitions –which included shares in The Walt Disney Company, Facebook, Starbucks, and more.

The fund purchased over five million shares in Disney which translate to a value of almost $500 million. Even though these shares are just a drop in the bucket of the whole company, the investment comes at an unprecedented time for the Disney company.

Cinderella Castle

The Public Investment Fund’s investment in Disney comes after its sizable purchases in Live Nation, Carnival Cruises, Tesla, and Uber since the start of 2020. The fund also boosted its number of shares in 23 other companies such as IBM, Boeing, ADP, Bank of America, and Marriott totaling more than $10 billion of equity in the U.S. market.

Which sector of business do you think will have the biggest impact on The Disney Company during the closures? Let us know in the comments!

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Disney Business Disney Financials Disney Parks Other

Orange County Mayor doesnt think the theme parks will open till June

Orange County

Across the nation, theme parks have been closed since mid-March due to the COVID-19 pandemic. Orlando is the theme park capitol of America and it’s been over two months since anyone has visited Walt Disney World Resort, Universal Orlando, or SeaWorld Orlando. Even though businesses are beginning to return in phased openings, the Orange County Mayor doesn’t expect Central Florida’s theme parks to reopen until at least June.

During a recent coronavirus update, Governor Ron DeSantis made the announcement of how Florida will enter a “full phase one” by Monday, May 18th. Theme park organizations can start submitting their plans on that day. To clarify, those plans must include a date for when theme parks reopen, guidelines to keep both employees and guests safe, and an endorsement from an appropriate elected official.

Orange County Mayor Jerry Demings is able to provide such an endorsement, however, he revealed how he hasn’t received any reopening plans from Disney, Universal, or SeaWorld. He did say that theme parks could be permitted to reopen during the second phase, but there’s no scheduled date for when phase two will begin in Florida. Orange County Major Demings went on to say the following:

“Suffice it to say, they’re looking at later dates to reopen and I believe what we can expect or anticipate in our community is a measured reopening. They will likely start with smaller business units, maybe hotels and resort-type areas before the major, massive theme parks themselves will reopen but in any case I suspect that that is going to be, clearly, some time in June or thereafter before that occurs.”

Source: Click Orlando

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