Disney's Ongoing Political Woes Spark Share Sell-Off
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The Walt Disney Co’s (DIS:US) feud with Florida Governor Ron DeSantis has been going on for some time now. Early last year, Disney’s then-CEO Bob Chapek criticized DeSantis’ legislation on restricting discussions on topics related to gender and sexuality in Florida schools.
In response, DeSantis used his political power to threaten Disney’s future development of theme parks in the state. He also doubled down by suggesting increased scrutiny of Disney’s rides and theme parks.
Disney Hits Multi-Year Lows
A political fight like this is hurting a lot of stakeholders, most prominently the shareholders of the entertainment company. Disney stock closed just below the $80 mark recently, a low last seen over 8 years ago in 2015.
In May this year, Disney canceled its plans to build a $1 billion campus that would have housed 2000 of its employees. Disney CEO Robert Iger had this to say to the state of Florida: "Does the state want us to invest more, employ more people and pay more taxes, or not?"
A Glimmer of Hope
Clearly, things aren’t going well for Disney shareholders but last week’s rumors that Disney may be planning to sell ABC have people talking about a turnaround. Bryon Allen, a media entrepreneur, offered $10 billion to buy ABC Television and its assets. This immediately made the stock price go up but the stock still closed below the opening price for the week. Disney was quick to deny any such deal.
The sale of these assets is supposed to start off a grand plan that will see Disney return to its past glory. But its political problems won’t go away any time soon.
The Politicians Have Been Selling Relentlessly
Since the start of this year, politicians have sold a total of $348,000 - $1.02 million worth of DIS stock. On the other hand, there have only been $37,000 - $205,000 worth of buy transactions. Interestingly, all these buy transactions were carried out by Ro Khanna, who is known as a frequent trader. Effectively, this means not a single politician has bought Disney stock this year.
Digging deeper into the details, politicians from across the country have been reducing their positions in the company. Michael McCaul is by far the biggest liquidator, selling $200,000 - $500,000 worth of stock this year. Ro Khanna stands in second place with $115,000 - $375,000 worth of sell transactions.
It is clear that politicians have been running for the exit when it comes to Disney stock. Things are not looking good for the entertainment company despite the current spike in its stock price after the ABC sale news broke out. The stock is hovering around the $86 mark in pre-market trading today.
