With Disney’s parks and resorts shuttered across the globe due to the ongoing COVID-19 pandemic, and movie theaters across the nation sharing a similar fate, the conglomerate’s revenue has been severely compromised, giving temporary leeway for companies like Netflix, which are focused on “stay-at-home” products like video streaming, to gain a financial advantage. In fact, just this Wednesday, Netflix had officially passed Disney in terms of worth, with stocks for the company hitting an all-time high at market close. However, the Mouse is back, with Disney shares rising 4.5% today, closing at $106.63 a share. It seems the prospect of a phased reopening has reinstated shareholders’ faith in the company after the initial damage of the still-ongoing health crisis, boosting market capitalization for Disney to over $192 billion.
Yesterday, the White House issued new federal guidelines for the “Opening Up America Again” effort, listing the three phases each state will eventually go though before clearing Phase 3, which would be considered life after a COVID-19 vaccine or at the very least a full drop-off in cases. In our analysis of the new guidelines, it isn’t until the state enters Phase Two that we’d imagine the parks could truly reopen, with Non-Essential Travel resuming at that time, and only moderate social distancing required. You can read our full analysis of the new guidelines here.
It was shortly after the announcement that Netflix ended its brief two-day stint on top of the entertainment market.
While these new guidelines will certainly pave the way to a potential reopening, that doesn’t necessarily imply that it will happen anytime soon. According to BMO Capital analyst Dan Salmon, he doesn’t expect Disney’s theme parks to begin reopening before July 1. (The earliest any state can begin to progress through the Phases outlined above is May 1.) Regardless of their market worth, Disney is still facing an uphill battle, as the company has accrued $13 billion in debt and credit agreements in order to mitigate the financial effects of closing down its parks and film studios.
Source: Variety | Featured Image: Matthew Cooper Photography