Millennial Investors Are Buying Up Shares of Disney Ahead of Earnings Report


Disney’s proposed $71.3 billion acquisition of 21st Century Fox is guaranteed to be the main focus of Tuesday’s earnings report from the entertainment mammoth- and from the looks of things, millennial investors seem rather optimistic.

Prior to the company’s third quarter earnings report, which will occur today after the closing bell, investors on the trading app Robinhood who own shares of Disney totaled 65,744.  That a 2.5% increase since July 2nd, when 64,137 Robinhood users held shares of the stock.  This is also far outside the regular weekly moving average of 600, since Business Insider first began tracking the data at the end of June.

Disney placed their first bid for 21st Century Fox’s production assets in December of 2017, originally offering $52.4 billion in stock for the media conglomerate’s production assets and some channels, excluding Fox News, Business and Sports channels, which will be re-branded as “New Fox”.  That initial offer was followed by a bidding war with Comcast who offered Fox $65 billion cash in June.  Comcast then subsequently dropped out after seeing Disney’s response, which was an offer of $71.3 billion that was presented to Fox the following week.

Both Disney’s and Fox’s shareholders have given their approval for the merger, however, the deals destiny still lays in the hands of US and international regulators.

For the quarter that ended on June 30th, analysts are expecting Disney to report earnings per share of $1.94 on revenues of $15.63 billion.  And once the Fox buyout is completed, that will mean more work ahead for Disney.

“Even after spending $80-$90 billion, we believe Disney will need to further invest many incremental billions per year for many years on content (in the form of foregone licensing, as well as new original content), plus marketing and tech/ops, to launch its direct-to-consumer products and give them the best chance for success,” ToddJuenger, a media analyst for Bernstein said in a note last month.

“It will also be at least another ear before the entertainment DTC product(s) is scheduled to be launched (and it will probably be staged globally, so another year or two or more before Disney as a fully global service (s)), and plenty of integration and execution risks remain.”

Shares of Disney are currently up 4.4% since the beginning of 2018.


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