Scott R. Grossman
Founder of Vindico Capital, Consumer-Sector Investor
Softening theme-park trends are a critical support for the Disney short ahead of its August 5 results. Comcast said its parks operating environment softened more than anticipated, with attendance across the broader Orlando market starting to weaken even as Epic Universe performs well. x.comÂ
Disney is very likely to break below its 200-period moving average, opening a path to $40, with the fourth quarter of 2021 marking the peak. Streaming cancellations are skyrocketing, and people who can't afford groceries won't go to Disney parks either. x.comÂ
Disney is a dog with fleas. Absurdly high theme-park prices face demand elasticity as a weakening consumer in a K-shaped economy pulls back. Its movie lineup is dated, with live-action Moana joining Snow White as box-office bombs; its balance sheet carries heavy debt from poorly conceived acquisitions that could curb park spending; and AI threatens several businesses. There is a price for everything: below $90, reward versus risk turns favorable. x.com x.comÂ
Disney's improved fundamentals against a compressed P/E make the shares a coiled spring. Revenue is climbing 5-10% yearly, net income rose from $2 billion to $12 billion, and margins expanded while the stock has not reached a new all-time high in six years. That is a six-year discount with sixfold better fundamentals. x.comÂ
Disney looks like a dead stock walking as it raises streaming prices again on a service with little to no new content and many more commercials. Subscribers seem unlikely to keep paying, which is probably why management stopped reporting subscriber numbers. x.comÂ
Disney is a value trap over the medium to long term, with no real reason to structurally re-rate. It can work as a tactical trade, to own when parks data is good and consumers keep absorbing price increases. That answers @ErnestWongBWM's case that parks are about 60% of profits and the stock trades below 15 times 2026 consensus EPS. x.comÂ
Disney's stock has gone nowhere since 2015 even as the business grew substantially. Revenue doubled, its cruise fleet doubled from four to eight ships, Disney+ and Hulu became a streaming powerhouse, parks hit record revenue and attendance, and it broke the record for highest-grossing animated film three times. x.comÂ
Comcast's Peacock spinout could reveal value because Peacock has grown faster than Netflix to 48 million subscribers, with structurally lower costs. Its $1 billion EBITDA run rate is twice Netflix's at that subscriber count in 2014. A library, theatrical windows, ISP/CDN delivery, ISP customers and Xfinity upsells help. At 7x earnings, valuing Peacock, media and parks like 2014 Netflix leaves roughly $30 billion in RemainCo EBITDA against $51 billion in remaining market cap. x.com x.com x.comÂ
Disney's old IP thesis was wrong because its business has been too capital-intensive as run this century. Even buying at the exact lows over roughly 12 years would have meant losing badly to inflation. Re-entry would only make sense if Disney changed its operating model, perhaps even through a split. x.comÂ
Disney is a buy now that Bob Iger, its biggest liability because he would not let go, has stepped aside. Its parks drew about 145 million visitors last year, more than any country, including France at about 100 million. x.comÂ
Comcast and Charter now have a clear catalyst path to higher free cash flow per share from what were already the cheapest valuations in the S&P 500. Comcast's NBCUniversal spinoff, Brian Roberts stepping down and former CFO Michael Angelakis returning as CEO look like a precursor to merging Comcast with Charter, possibly next year once Charter's Cox deal closes. Netflix may buy NBCU at a healthy multiple. Both are very crowded shorts, echoing Warner Bros. Discovery in summer 2025. x.com x.com … Show more
