Disney: Going Digital — Where Imagination and Experience Converge

Jonathan Isaac of Quilt Investment Management presented his investment thesis on The Walt Disney Company (US: DIS) at Wide-Moat Investing Summit 2021.

Thesis summary:

Disney is juggling numerous disparate and seemingly conflicting interests with their current approach to media. In addition to maintaining multiple streaming platforms, they split ESPN and film releases across old and new media.

Jonathan’s presentation models how Disney might consolidate its film operations and cable channels — including a streaming-only ESPN — into a closed-loop streaming platform in order to achieve attractive scale economics. This would enable Disney to shift its focus towards the monetization of new streaming consumers.

Disney has a long history of growing consumer monetization faster than its consumer base. Existing infrastructure — consumer products, theme parks and resorts, etc. — can be deployed towards growing the Lifetime Customer Value of this new consumer by appealing to their imagination. A successful transition could result in a stock price of ~$425 per share by 2028. A merger with Apple, financed in part by Berkshire Hathaway, is not entirely out of the question.

Disclaimer/Disclosure: Of the securities mentioned in this synopsis, Quilt Investment Management, LLC currently holds Disney in client accounts, and Apple in a client account, and may transact in either security, as well as any other security mentioned, without future updates. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of specific securities, investments, or investment strategies. Additionally, the information should not be construed as Quilt Investment Management, LLC’s solicitation to effect the rendering of personalized investment advice for compensation, over the internet or otherwise. This is not a research report and/or a recommendation. Investments involve risk and, unless stated otherwise, are not guaranteed. Always be sure to first consult with a qualified financial adviser and/or a tax professional before investing, and to verify any information deemed to be accurate. Past performance is not indicative of future performance.

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About the instructor:

Jonathan Isaac is President and Portfolio Manager of Quilt Investment Management, LLC, a registered investment adviser in Portland, Oregon.

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