The impact of the coronavirus has been felt by Disney, leaving it vulnerable to companies like Apple that could potentially take advantage of these tough times and acquire them. The coronavirus has been exponentially wreaking havoc over America in the past week. There is a national travel ban prohibiting American citizens from traveling to Europe. Additionally the federal government has suggested avoiding gatherings of more than 10 people. Individual state governments are also placing stricter bans and closing down schools, movie theaters, bars, and restaurants.
The entertainment industry is one that has suffered most from the coronavirus. It began to feel the impact back when cinemas were being closed in China. This caused many movies like No Time to Die and Mulan to postpone press tours and release dates in China. As China makes up a big component of a film's international profits, these films have been burdened greatly. As the precautionary measures spread to Europe and the United States, the industry is only suffering more. Many American films and TV shows have had to pause filming altogether. Broadway has had to close down its doors until April 12th at the earliest. Disney is one of the entertainment giants that has been hit the hardest. Not only does it have content on all of those mediums, its Walt Disney World and Disneyland theme parks have been forced to shut down.
According to THR, this has put Disney in a spot in which it's susceptible to being acquired by a larger company like Apple. Disney's stocks are reflective of the hard hit the entertainment industry has endured. Walt Disney Co. officially dropped below the $100 mark last week. As of Friday, Disney's stocks rose 11.2 percent to $102.52 while Apple is currently thriving, jumping 12 percent to $277.92. Additionally, Disney has lost $85 billion, which is around one third of its market cap. Rosenblatt Securities analyst Bernie McTernan concluded that it could cause an acquisition like no other in his research report. He explained, "We believe those with long-time horizons, like mega-cap companies with large cash balances and whose equity outperformed Disney over the last three weeks, like Apple, could take advantage of the volatility."
McTernan believes it would be advantageous for Apple to act on this opportunity and acquire Disney. Disney will likely never be at this much of a low point again. Additionally, Apple could learn a thing or two from Disney's streaming platform Disney+. While Disney+ has been thriving along with streaming giants Netflix, Amazon Prime, and Hulu, AppleTV+ hasn't been seeing the same level of success. A partnership could help Apple get a better handle on the profitable streaming industry.
It's disheartening to see a company like Disney that has such a warm place in so many peoples' hearts suffering. Additionally, it comes as a shock since it seems like just the other day it was trying to take over the world with Disney+ and plans of the Marvel-based Avengers Campus to open in July. Disney may lose some of its heart and soul if acquired by an economic giant like Apple.
As troubling as it is to see Disney suffer, this only means that smaller businesses and individuals are hurting even more. While Disney has billions of dollars to its name, these smaller components of the economy only have hundreds or even less. With companies losing money, people are losing their jobs in an already stressful climate. Hopefully, Disney and these individuals will soon see the light at the end of the tunnel.
Source: THR
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