The Walt Disney Company (DIS) is looking to expand as it recently acquired 20th Century Fox and launched its own streaming service, Disney+. This shift has added considerable debt to the company, and it is carrying more leverage than it has in over a decade. Simultaneously, it has lost pure profit from unwinding its licensing deals (with Netflix (NFLX) ) to stockpile content for its streaming service. That squeezes Disney’s bottom line and points to a hurdle that must be overcome. The coronavirus and its economic impact has already caused a global economic slowdown and the possibility of a recession looms. Companies with the most debt may fare the worst.
On top of this, Walt Disney Company has recently announced a reorganization of its top executives. Bob Chapek was recently named CEO, and former CEO Robert Iger was appointed Executive Chairman. It's speculated that a considerable amount of Iger’s focus would likely be directed at the film group and its long-term leadership, which has several portfolios such as Pixar, Marvel, and Lucas Films. How well these transitions are executed can have a great impact for investors.
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