Does Disney: Does The Story Make Sense?
Issue 1: Does the “story” make sense?
Disney has a competitive advantage by buying Marvel because it is considered liked by many people
By buying Marvel Disney is able to put the characters into their theme park for attractions
Provides new intellectual property for TV shows and expands their consumers worldwide
Issue 2: What are sources of risk and can they be managed?
A competitor could buy out DC Comics and use that to compete against Disney for buying Marvel
Marvel’s lesser characters could fail to be groomed into stars, and that could cause a loss in profit in the deal
Issue 3: How can the investment be financed?
The investment will be financed through stock and cash
Marvel will receive about 1.44 billion in cash and Disney stock
Issue
4: What is the short-term effect of the investment’s acceptance on Disney’s reported earnings?
The firm’s earnings per share (EPS) may be diluted in the short run
After the deal was complete Disney shares feel 3 percent to about $26
Earnings would be low in the beginning because Marvel’s stock prices in shares went up
Issue 5: Does the investment have inherent flexibilities that allow Disney to modify it in response to changing circumstances?
Disney was willing to support future Marvel films because of Marvel’s lack of capital.
Expanded certain Marvel characters to theme parks around Paris and Hong Kong
Disney has a competitive advantage by buying Marvel because it is considered liked by many people
By buying Marvel Disney is able to put the characters into their theme park for attractions
Provides new intellectual property for TV shows and expands their consumers worldwide
Issue 2: What are sources of risk and can they be managed?
A competitor could buy out DC Comics and use that to compete against Disney for buying Marvel
Marvel’s lesser characters could fail to be groomed into stars, and that could cause a loss in profit in the deal
Issue 3: How can the investment be financed?
The investment will be financed through stock and cash
Marvel will receive about 1.44 billion in cash and Disney stock
Issue
4: What is the short-term effect of the investment’s acceptance on Disney’s reported earnings?
The firm’s earnings per share (EPS) may be diluted in the short run
After the deal was complete Disney shares feel 3 percent to about $26
Earnings would be low in the beginning because Marvel’s stock prices in shares went up
Issue 5: Does the investment have inherent flexibilities that allow Disney to modify it in response to changing circumstances?
Disney was willing to support future Marvel films because of Marvel’s lack of capital.
Expanded certain Marvel characters to theme parks around Paris and Hong Kong