Walt Disney Company Evaluation Research Paper

Listing in a Stock Market Exchange

Walt Disney Company remains one of the largest publicly traded mass media and entertainment companies in the United States and across the globe. It first offered its initial public offering in 1957, where it first publicly traded its stock for $13.88 per share (Yahoo Finance, 2019). Since then, the company continues to list and trade its stocks on the New York Stock Exchange (NYSE) Market under the company symbol, DIS (Heckman, 2017). NYSE is the world’s largest stock market with a market capitalization of more than $16 trillion, located in Wall Street, New York City (Heckman, 2017). The Securities and Exchange Commission regulates the market.

Evaluation of the Company’s Worth of Stock for the Past Three Years

Like any other stock, Walt Disney Stock has been fluctuating over time. For the last three years, the company’s stock price has averaged $116.04 (Yahoo Finance, 2019). The stock prices averaged at $106.879, $108.335, and $131.6 in 2017, 2018, and 2019 respectively. On January 01, 2017, it closed at an adjusted price of $105.96 (Yahoo Finance, 2019). By December 31, 2019, the adjusted closing stock price was at $144.63 (Yahoo Finance, 2019). The increase in the value of the stock indicates that the company’s performance has been improving over time. Within the three years, Disney’s stock price was at its lowest on September 7, 2017, when it was at $93.638 (Yahoo Finance, 2019). It was at its highest on November 26, 2019, when the company recorded an adjusted closing stock price of $150.737 (Yahoo Finance, 2019). On the last day of its operation within the three years, December 31, 2019, it had an opening stock price of $143.47 and a closing stock price of $144.63 (Yahoo Finance, 2019)

The company first initiated a stock split on December 18, 1962, when it did a 103-for-100 split, meaning that for 100 shares previously owned by Disney stockholders, the shares increased to 103 (Stock Split History, 2019). So far, the company had done eight splits with the most current split taking place in June 2007 when it made a 1014-to-1000 split (Stock Split History, 2019). Every time a split takes place, the number of shares that shareholders own increases, but the market capitalization remains the same due to a lower price per share.

By the end of 2019, Walt Disney had outstanding shares of $1.666 billion, which was an increase of more than 10% from 2018 (Yahoo Finance, 2019). Disney’s outstanding shares are shares that the company has authorized and issued to shareholders granting them voting rights as owners of the company. From the precise evaluation, it is viable to invest in the company’s stock since it seems less risky and profitable. Disney’s share prices have been increasing for the last three years, with the company recording a drastic increase in 2019. It also has a history of stock splits and increasing outstanding shares. Thus, the shares are predictably profitable.

Comparison of the Company’s Stock to Time Warner’s Stock

Time Warner is one of the main competitors in the media and entertainment industry. In contrast to Disney, Time Warner has shares outstanding of 782.32 million, which is much lower (Macrotrends, 2019). Its last adjusted closing share price was $98.77, while Disney’s last closing share price was $144.63 (Macrotrends, 2019). Times Warner has had one stock split, which took place in March 2009 (Macrotrends, 2019). Unlike in the case of Disney, Times Warmer undertook a reverse split in which the company required issued stock leaving shareholders with less outstanding shares. As such, investing in Times Warner’s stock is much riskier than investing in Disney’s stock.

References

Heckman, L. (2017). The New York Stock Exchange. doi:10.4324/9781315149226

Macrotrends. (2019). Disney shares outstanding 2006-2019. Retrieved from https://www.macrotrends.net/stocks/charts/DIS/disney/shares-outstanding

Stock Split History. (2019). Walt Disney stock split history. Retrieved from https://www.stocksplithistory.com/walt-disney/

Yahoo Finance. (2019). Walt Disney Company stock historical prices & data. Retrieved January 2, 2020, from https://finance.yahoo.com/quote/DIS/history?period1=1483304400&period2=1577912400&interval=1d&filter=history&frequency=1d