Disney Investors Display Incredible Faith
Covid-19 has taken aim at every one of Disney’s businesses, but not its lofty valuation. Why are investors so sanguine?
Cinderella Castle may still be the perfect metaphor for Disney — just not in the way it might seem.
Photographer: Joe Raedle/Getty Images North AmericaThere are no fireworks over Cinderella Castle these days, and yet investors remain captivated by Walt Disney Co. Are they caught up in fantasy?
The whimsical palace overlooking Disney’s Magic Kingdom in Orlando, Florida, has long stood as a symbol of the company and its status as both a source of enchantment and an impenetrable fortress in the entertainment world. Like the castle, Disney is well built, stately and admired, and it’s surrounded by an ostensibly protective moat. But much has changed this year. Operating profit — normally driven by the company’s theme parks and cable-TV networks such as ESPN — plunged 98% in the three months through June 27 from a year earlier as the Covid-19 crisis took aim at every single one of Disney’s lines of business.