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Short: Disney
Well, I’m up early this morning reading the news and stumbled across this:
Defiant Disney says ‘no’ to bid via BBC NEWS
The board of entertainment giant Disney has unanimously rejected a takeover bid by cable firm Comcast, and endorsed its much-criticized chief, Michael Eisner.The firm conceded it would consider any “legitimate proposal” to enhance shareholder value, but argued Comcast’s $54bn (£29bn) price-tag was too low.
What does this mean? This means that the board of directors at Disney has valued their company much higher than what the market did days before the proposed buyout by cable operator Comcast. Of course, at the news of the buyout bid share prices rose to meet the bid and then exceeded them at the end of the week — probably prompting the quote above.
There are two obvious things to me here: Disney has a very strong brand image that can muster a lot of support behind it, and the facts behind that support do not cut the mustard. There is apparent lack of support by shareholders for chief Michael Eisner — at very least some internal turmoil. For me, news alone that Disney had let future works with Pixar (of Toy Story and ‘Nemo fame) fall by the wayside prompted some doubts in me. Of course, I am inundated with ‘Buzz’, ‘Buzz’ all day long from my 1-year-old, so the Pixar thing hits close to home.
So the short of it (wink) is that I am shorting Disney in my mock portfolio. I will short at the opening price this morning.
If you are not familiar with stock shorting, here is a good FAQ.
written by Kevin in investing