Isn't this just a case of being proactive and looking at gaining cash reserves?
Bingo. They're paying 2% above the treasury rate, not exactly a panic buy. Their annual interest due will be something like $330 million, that's a lot of money but at the same time a tiny fraction of the $11 billion dollars they made in Net Income last year.
Anyone who heard the quarterly call disney is burning cash at a fast rate. No fault of disney's and they couldn't predict this happening, but they are burning cash at a fast pace. We found out why alot of construction stopped at least to preserve cash for things that hadn't been paid for.
Don't assume that the rate Disney burned cash in March is the rate Disney is burning cash now, or the rate Disney will be burning cash in 3 months if this drags on. It is pretty easy to stop spending money when your business is halted, and there are thousands of white collar employees they can lay off if they need to later. Not only are they no longer paying front line workers, but think of all the food they had to throw away. Think of all the Flower and Garden merch they'll never sell. Think of how much they spent on advertising that they had already contracted and couldn't turn off. There's a pretty big list of things that are expensive when you close, once, but then you can avoid having as expenses while you remain closed.
And also don't confuse burning cash with losing money. Disney has a LOT of amoritized expenses and depreciating infrastructure that they paid for years ago, but "count" against the company now. For example, Disney capitalizes Theme Park rides and major refurbishments for 20 years. That means that every quarter, their expenses show 1/80th of the cost of new expenses like SW:GE, but also things like the construction of Pandora, Expedition Everest, Mission Space and the Journey Into Imagination with Figment redo. But the cash for those was paid out a long time ago. They'll lose a lot more money than they burn cash.
And on the Flip Side, ESPN is still collecting $8 a month from 80 million households, sports or no sports. The NYT reported that they're MORE profitable now than with sports, because they're not flying thousands of people around the country each month, and that's more than covering the lost ad revenue.
A wounded Disney is at risk of a takeover. Remember during the last turndown when Comcast was talking about buying Disney? They ended up buying Universal in 2011. Now there are rumors that Apple could buy Disney with all of their cash.
Disney banked about 13 billion in 2019 from its movie business. What will become of the company if the movie industry never recovers?
Apple/Disney rumors have been around ever since Bob Iger showed up on stage at the iPod Video launch event in 2005. Bob Iger said in his book that Steve Job would have bought out Disney if he hadn't died. But I think that ship has sailed. Apple certainly
could do it, but Disney's cash situation is not going to be a determining factor in that unless the cash becomes zero. The stock price is the determining factor in that.
