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Does the return of veteran “Boomerang Boss” Bob Iger give the Disney share price more upside?

Like many of the stocks to do particularly well during the Covid-19 pandemic, Disney has struggled since with its share price down…
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Like many of the stocks to do particularly well during the Covid-19 pandemic, Disney has struggled since with its share price down 38.63% this year. The multinational mass media and entertainment company’s valuation is down by over 51% since its high point of $197.16 set in March 2021.

Despite the positives like the Disney+ streaming service that rivals Netflix beating expectations by announcing year-on-year growth of 39% to reach 164.2, the Disney share price fell 6.9% after quarterly result were announced earlier this month. At one stage during after-hours trading the evening after the announcement, it dropped as low as $93.

Overall earnings and revenues disappointed investors with a $1.5 billion loss for the streaming division that also includes the sports broadcaster ESPN taking the shine off the success of Disney+ adding millions of new subscribers at an accelerating pace.

Despite total revenue rising by 9% to $20.15 billion during the three months to October 1, largely thanks to a strong post-pandemic recovery for Disney’s theme parks, the total fell short of analyst expectations for $21.2. Net income increased by 2% to $162 million.

Despite then chief executive Bob Chapek impressing that the streaming business was on course to reach profitability by 2024 “assuming we do not see a meaningful shift in the economic climate”, markets punished the Disney share price by dragging it to its lowest level since the February to March 2020 Covid sell-off. Of particular concern was the spiralling cost of ESPN’s investment in sports rights.

Bob Iger makes a comeback to replace Chapek as Disney’s new old CEO

What wasn’t expected in early November was that within a couple of weeks, Disney would have a new chief executive in the place of Chapek. The identity of Chapek’s replacement would come as a particular surprise. But 71-year-old Bob Iger, the veteran Disney chief executive that handpicked Chapek as his replacement upon announcing his 2020 retirement after 15 years in the hot seat has indeed been tempted back.

In an email to Disney staff, Iger told them he viewed his reappointment to the top job

“with an incredible sense of gratitude and humility — and, I must admit — a bit of amazement.”

The market also reacted positively to news the Disney boss that presided over a period of impressive growth fuelled by acquisitions suck as Pixar, Marvel Entertainment and 20th Century Fox had been reappointed. The company’s share price leapt 10% when Iger’s return was announced before eventually closing the session to a 7% gain. PP Foresight analyst Paolo Pescatore is quoted by The Times as commenting:

“The bold move [Iger’s return] might feel like the right one. However, the business is at a different phase of growth.”

Wells Fargo analysts were even more emphatic, writing the move

“puts perhaps the best leader in Media at the helm with a mandate to shake things up.”

Netflix co-founder Reed Hastings made perhaps the most telling contribution to the return of Iger to the company that owns the streaming giant’s most serious competitor when he tweeted:

“Ugh. I had been hoping Iger would run for president. He is amazing.”

What must Iger fix at Disney to set it back on track?

Put most simply, Iger’s job in his return to the role of Disney chief executive is first to stem losses and then to restore profitability. It can be presumed that a review of the company’s approach to acquiring expensive sports rights will figure prominently in both stages of the hoped-for turnaround.

The activist investor Daniel Loeb, whose Third Point investment group is a significant shareholder in Disney and was given a seat on the board in August, wants to see ESPN spun off. Another major step towards profitability for Disney+ will hopefully be the introduction next month of a new cheaper advertising-funded subscription tier. Netflix has just launched its ad-supported tier in the USA, charging $6.99 per month compared to $15.49 for its standard ad-free subscription and $19.99 for a premium account.

Iger, who is reported to have had doubts about his choice of Chapek as his replacement after the pair clashed during the transition period, is seen as having stronger relationships with Hollywood executives and a better intuition when it comes to the creative side of the business. His major Hollywood acquisitions all contributed significantly to Disney’s growth under him during his previous period in charge.

It can also be presumed he will more successfully avoid distractions such as Chapek’s public culture war with Florida’s outspoken Republican governor Ron DeSantis over what teachers in the state can say on LGBTQ+ topics. There was also an embarrassing legal dispute with Scarlett Johansson, star of Disney’s Black Widow film, over the decision to release the production in cinemas and over its streaming platform simultaneously. There’s a strong feeling the situation would have been nipped in the bud under Iger.

Can Iger work some of his old magic in just 2 years?

Investors wondering if the current Disney share price represents an improved upside under Iger should start the thought process in the context that the old new chief executive has said his return will only be for 2 years. The question is how much can he get done in that time and if the next choice of his successor will prove a better one than Chapek ultimately proved.

Stemming streaming losses while still catching up on Netflix’s global market share will be the big challenge for Iger.

Disney+

The days of “growing streaming at any cost” are over for Wall Street, and Disney’s leadership under Iger will have to prove to investors that Disney+ can achieve profitability relatively quickly while also continuing to grow. This will move the needle on Disney’s share price more than anything else Iger might achieve.

Sports and films

Previously seen as a valuable asset, ESPN has been losing viewership recently despite huge investments in sports rights and that has been hurting the business. That’s the crux of Loeb’s argument the business should be “spun off to shareholders with an appropriate debt load”.

He’s since stepped back from that demand since being given a seat on the Disney board but the point was made and Iger will have to show he can make money from ESPN again.

Another issue is the revenue being generated by Disney’s film studios. In the year before the pandemic and Iger originally stepping down, Disney released seven films that each hit $1 billion in global box office takings. This year only two Disney releases have achieved the same level of success.

Iger must ask and answer the question of if streaming and the pandemic have permanently changed the landscape for cinema releases and adjust Disney’s strategy accordingly.

Can Iger drive share price growth for Disney?

It remains to be seen if Iger’s return to Disney will prove an inspired or desperate move but market analysts seem confident he can drive the company’s share price back up. Only the most negative analysts believe Disney’s valuation will drop over the next 12 months, and then to just $94, which is only slightly below the current $96.21 level.

chart

Downside from the current valuation looks limited and on the upside, the median 12-month share price target of 25 analysts polled by CNN is $120, which would represent returns of almost 25%. The most optimistic analysts have a 12-month share price target of $145, which would deliver returns of over 50%.

Iger has a challenge on his hands and just 2 years to rise to it. But if early signs are positive, Disney investors are likely to be hailing the Boomerang Boss this time next year.

The post Does the return of veteran “Boomerang Boss” Bob Iger give the Disney share price more upside? first appeared on Trading and Investment News.

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Climate-Change Lockdowns? Yup, They Are Actually Going There…

Climate-Change Lockdowns? Yup, They Are Actually Going There…

Authored by Michael Snyder via The End of The American Dream blog,

I suppose…

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Climate-Change Lockdowns? Yup, They Are Actually Going There...

Authored by Michael Snyder via The End of The American Dream blog,

I suppose that we should have known that this was inevitable.  After establishing a precedent during the pandemic, now the elite apparently intend to impose lockdowns for other reasons as well.  What I have detailed in this article is extremely alarming, and I hope that you will share it with everyone that you can.  Climate change lockdowns are here, and if people don’t respond very strongly to this it is likely that we will soon see similar measures implemented all over the western world.  The elite have always promised to do “whatever it takes” to fight climate change, and now we are finding out that they weren’t kidding.

Over in the UK, residents of Oxfordshire will now need a special permit to go from one “zone” of the city to another.  But even if you have the permit, you will still only be allowed to go from one zone to another “a maximum of 100 days per year”

Oxfordshire County Council yesterday approved plans to lock residents into one of six zones to ‘save the planet’ from global warming. The latest stage in the ’15 minute city’ agenda is to place electronic gates on key roads in and out of the city, confining residents to their own neighbourhoods.

Under the new scheme if residents want to leave their zone they will need permission from the Council who gets to decide who is worthy of freedom and who isn’t. Under the new scheme residents will be allowed to leave their zone a maximum of 100 days per year, but in order to even gain this every resident will have to register their car details with the council who will then track their movements via smart cameras round the city.

Are residents of Oxfordshire actually going to put up with this?

[ZH: Paul Joseph Watson notes that the local authorities in Oxford tried to ‘fact check’ the article claiming they’re imposing de facto ‘climate lockdowns’, but ended basically admitting that’s exactly what they’re doing...]

I never thought that we would actually see this sort of a thing get implemented in the western world, but here we are.

Of course there are a few people that are loudly objecting to this new plan, but one Oxfordshire official is pledging that “the controversial plan would go ahead whether people liked it or not”.

Ouch.

Meanwhile, France has decided to completely ban certain short-haul flights in an attempt to reduce carbon emissions…

France can now make you train rather than plane.

The European Commission (EC) has given French officials the green light to ban select domestic flights if the route in question can be completed via train in under two and a half hours.

The plan was first proposed in 2021 as a means to reduce carbon emissions. It originally called for a ban on eight short-haul flights, but the EC has only agreed to nix three that have quick, easy rail alternatives with several direct connections each way every day.

This is nuts.

But if the French public accepts these new restrictions, similar bans will inevitably be coming to other EU nations.

In the Netherlands, the government is actually going to be buying and shutting down approximately 3,000 farms in order to “reduce its nitrogen pollution”

The Dutch government is planning to purchase and then close down up to 3,000 farms in an effort to comply with a European Union environmental mandate to slash emissions, according to reports.

Farmers in the Netherlands will be offered “well over” the worth of their farm in an effort to take up the offer voluntarily, The Telegraph reported. The country is attempting to reduce its nitrogen pollution and will make the purchases if not enough farmers accept buyouts.

“There is no better offer coming,” Christianne van der Wal, nitrogen minister, told the Dutch parliament on Friday.

This is literally suicidal.

We are in the beginning stages of an unprecedented global food crisis, and the Dutch government has decided that now is the time to shut down thousands of farms?

I don’t even have the words to describe how foolish this is.

Speaking of suicide, Canada has found a way to get people to stop emitting any carbon at all once their usefulness is over.  Assisted suicide has become quite popular among the Canadians, and the number of people choosing that option keeps setting new records year after year

Last year, more than 10,000 people in Canada – astonishingly that’s over three percent of all deaths there – ended their lives via euthanasia, an increase of a third on the previous year. And it’s likely to keep rising: next year, Canada is set to allow people to die exclusively for mental health reasons.

If you are feeling depressed, Canada has a solution for that.

And if you are physically disabled, Canada has a solution for that too

Only last week, a jaw-dropping story emerged of how, five years into an infuriating battle to obtain a stairlift for her home, Canadian army veteran and Paralympian Christine Gauthier was offered an extraordinary alternative.

A Canadian official told her in 2019 that if her life was so difficult and she so ‘desperate’, the government would help her to kill herself. ‘I have a letter saying that if you’re so desperate, madam, we can offer you MAiD, medical assistance in dying,’ the paraplegic ex-army corporal testified to Canadian MPs.

“Medical assistance in dying” sounds so clinical.

But ultimately it is the greatest lockdown of all.

Because once you stop breathing, you won’t be able to commit any more “climate sins”.

All over the western world, authoritarianism is growing at a pace that is absolutely breathtaking.

If they can severely restrict travel and shut down farms today, what sort of tyranny will we see in the future?

Sadly, most people in the general population still do not understand what is happening.

Hopefully they will wake up before it is too late.

*  *  *

It is finally here! Michael’s new book entitled “End Times” is now available in paperback and for the Kindle on Amazon.

Tyler Durden Fri, 12/09/2022 - 06:30

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Sinema out, Warnock in — Democrats narrowly control the Senate and Republicans the House, but gridlock won’t be the biggest problem for the new Congress

With Democrats running the Senate and the GOP in control of the House, there’s concern that Congress won’t get anything done. Turns out, unified government…

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Will gridlock mean the new Congress won't get anything done? mathisworks/Getty Images

In the wake of the 2022 U.S. midterm elections, a general sense of the political landscape in the upcoming 118th Congress has taken shape. With Sen. Kyrsten Sinema’s announcement that she is leaving the Democratic Party and Sen. Raphael Warnock’s victory in Georgia’s runoff, Democrats will maintain control in the Senate, while Republicans will take control of the House.

Divided government sparks fears of gridlock, a legislative standstill. At face value, this makes sense. Given the different policy priorities of the two major parties, you might expect to see each party passing legislation out of the chamber it controls that has little chance in the other chamber - and thus no chance of becoming law.

Logically, this means a less productive legislature than one in which a single party with a unified agenda controls both chambers and the presidency.

But as a political scientist who studies partisanship, I believe that divided government - including during the upcoming legislative session - will not produce greatly different legislative results than unified government.

This isn’t exactly a hopeful story, though.

Not much passes

The first reason that divided government isn’t less productive than unified government is because unified government isn’t very productive in the first place. It’s really hard to get things done even when the same party controls both chambers and the presidency.

Most legislation only clears the Senate if it has the 60 votes needed to break a filibuster. Neither party has come close to a so-called “filibuster-proof majority” of 60 seats since 2010, when Democrats briefly held 60 seats prior to Massachusetts Sen. Ted Kennedy’s death and the election of Republican Scott Brown to that seat. Thus, even a unified government is likely only passing measures that have some degree of minority party support.

A bunch of tired-looking men in suits at a meeting.
It can take a lot of talking and listening to get legislation passed in Congress. Here, a meeting of the Senate Foreign Relations Committee on Nov. 30, 2022. Chip Somodevilla/Getty Images

There are ways to force passage of legislation when one party doesn’t want it to pass. A process called budget reconciliation is not subject to filibuster, but it can only be used on provisions that deal directly with changes in revenues or spending. This is what happened with the Inflation Reduction Act of 2022, which Democrats were able to pass via reconciliation, with Vice President Kamala Harris casting the tiebreaking vote.

Further, legislative success under unified government assumes that the majority party is united. There is no guarantee of this, as seen in 2017 when Republican senators John McCain, Lisa Murkowski and Susan Collins joined Democrats in blocking the repeal of the Affordable Care Act.

Between 2011 and 2020 the vast majority of new laws clearing the House - roughly 90% - and the Senate - roughly 75% - did so with a majority of minority party members in support.

Even landmark legislation usually has support from most minority party members in at least one chamber. For example, the substantial 2020 revision of the North American Free Trade Agreement, or NAFTA, passed the House and Senate with overwhelming bipartisan support, as did the defense bill that created the Space Force.

A group of people going down the stairs of the US Capitol building on a sunny day.
While Congress is not that productive, sometimes it passes legislation. Here, lawmakers stream out of the Capitol after passing the Coronavirus Aid, Relief, and Economic Security Act in 2020. Bill Clark/CQ-Roll Call, Inc via Getty Images

Rewards - and risks - in crossing lines

On a more positive note, divided government may still provide opportunities for legislative breakthroughs.

The reason? The local orientation of Congress - lawmakers need to respond to their district’s voters.

In the House, according to a New York Times analysis, Republicans won 10 of the most competitive districts, including five in New York state alone. But the Cook Partisan Voting Index, which measures how strongly a district leans in favor of one party or the other, scores some of these districts as tilting Democratic – potentially giving these Republican members of Congress reason to reach across the aisle. The same goes for Democratic lawmakers whose districts tilt Republican.

But these kinds of mixed districts can also make it hard for sitting lawmakers to vote with their own party. While parties will work to keep a united front, research suggests that voters may punish those members of Congress who toe the party line too closely – providing a potential incentive for crossing party lines. Democratic legislators in Republican-leaning districts who voted for the Affordable Care Act, the Dodd-Frank financial regulation bill, or the stimulus bill, all Democratic Party priorities, suffered electorally in the 2010 midterms, receiving a lower vote share than those who voted against the legislation. In many cases, these lawmakers lost their seats.

Still, defections may be more likely given weak leadership, and currently it’s not certain who will fill the speaker’s role in the next Congress.

More consequential aspects

You don’t have to search for long to see examples of large legislative achievements produced during periods of divided government.

Divided government produced welfare reform in the 1990s and social security reform in the 1980s. The Coronavirus Aid, Relief, and Economic Security (CARES) Act passed a Republican Senate and a Democratic House overwhelmingly in March 2020.

Certainly, there have been times during which unified governments have pushed legislation through with little minority party support. The Affordable Care Act and the Trump tax cuts were among them. But bipartisan legislative victories are much more common.

There are probably more consequential aspects to the GOP’s takeover of the House of Representatives than concerns over legislative gridlock.

House Republicans have already talked about using the investigatory powers of the chamber to investigate everyone from Hunter Biden to Anthony Fauci. A debt ceiling showdown, in which the GOP might use the threat of default on the U.S. government’s debt to force spending cuts, looms for what feels like the dozenth time in the past several years.

Matt Harris does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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First-ever social responsibility report of Chinese enterprises in Saudi Arabia incorporates BGI Genomics projects

On December 1, 2022, the Social Responsibility Report of Chinese Companies in Saudi Arabia was officially launched, which is the first such report released…

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On December 1, 2022, the Social Responsibility Report of Chinese Companies in Saudi Arabia was officially launched, which is the first such report released by the Contact Office of Chinese Companies in Saudi Arabia. BGI Genomics projects in the Kingdom have been incorporated into this report.

Credit: BGI Genomics

On December 1, 2022, the Social Responsibility Report of Chinese Companies in Saudi Arabia was officially launched, which is the first such report released by the Contact Office of Chinese Companies in Saudi Arabia. BGI Genomics projects in the Kingdom have been incorporated into this report.

This event was attended by around 150 representatives of Chinese and Saudi enterprises, Saudi government officials, experts in the field of sustainable development, CCTV, Xinhua News Agency, Saudi Press Agency, Arab News and other media professionals. This Report presents the key projects and best practices of Chinese enterprises to fulfil their social and environmental responsibilities while advancing the Kingdom’s industry development.

Chen Weiqing, the Chinese ambassador to Saudi Arabia, said in his video speech that the Report highlighted Chinese enterprises’ best practices in serving the local community, safe production, green and low-carbon development and promoting local employment. The release of the Report helps Chinese enterprises in the Kingdom to strengthen communication with the local community, laying a stronger foundation for future collaboration.

Epidemic control and accelerating post-COVID 19 recovery

BGI Genomics has been fulfilling its corporate social responsibilities and worked with the Saudi people to fight the COVID-19 epidemic.

In March 2020, Saudi Arabia was hit by the pandemic. The Saudi government decided to adopt BGI Genomics’ Huo-Yan laboratory solution in April 2020. At the forefront of the fight against the epidemic, the company has built six laboratories in Riyadh, Makkah, Madinah, Dammam and Asir within two months, with a total area of nearly 5,000 square meters and a maximum daily testing throughput of 50,000 samples.

By the end of December 2021, BGI Genomics had sent 14 groups of experts, engineers and laboratory technicians to Saudi Arabia, amounting to over 700 people, and tested more than 16 million virus samples, accounting for more than half of the tests conducted during this period. The company has successfully trained over 400 qualified Saudi technicians, and all laboratories have been transferred to local authorities for the operation.

In the post-epidemic era, the Huo-Yan laboratories can continue to make positive contributions to public health, working with local medical institutions and the public health system to make breakthroughs in areas such as reproductive health, tumour prevention and control, and prevention.

Enhancing genomic technology localization and testing capabilities

In July 2022, BGI Almanahil and Tibbiyah Holdings, a wholly owned subsidiary of the Saudi Faisaliah Group, announced a joint venture (JV) to establish an integrated, trans-omics medical testing company specializing in genetic testing.

This JV company will help improve Saudi Arabia’s local clinical and public health testing and manufacturing capabilities, promote the localization of strategic products that have long been imported, contribute to the implementation and realization of the Kingdom’s Vision 2030 roadmap, and significantly enhance local capacity for third-party medical testing services as well as local production of critical medical supplies.

BGI Genomics attaches great importance to fulfilling its corporate social responsibility and has released its social responsibility report for four consecutive years since 2017. Since its establishment, the company has always been guided by the goal of enhancing health outcomes for all, relying on its autonomous multi-omics platform to accelerate technological innovation, promote reproductive health, strengthen tumour prevention and control, and accurately cure infections, and is committed to becoming a global leader in precision medicine and covering the entire public health industry chain.

The company will continue to work together with all stakeholders to contribute to the Kingdom’s Vision 2030 and the Belt and Road Initiative and looks forward to growing with our partners.

 

About BGI Genomics

BGI Genomics, headquartered in Shenzhen China, is the world’s leading integrated solutions provider of precision medicine. Our services cover over 100 countries and regions, involving more than 2,300 medical institutions. In July 2017, as a subsidiary of BGI Group, BGI Genomics (300676.SZ) was officially listed on the Shenzhen Stock Exchange.

 


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