The Disney July 16 Call Options (strike price $170) are up another 17.98% today, May 25, as of 1:30 p.m. New York time to $9.91. I’m going to make my profit in this option position today ahead of the potential volatility later this week ahead of Friday’s big inflation data release. I bought these options back on May 17 at $7.17 a contract. I’m closing the position with a 32.6% gain.
Last night I said that I’d buy the Disney Call Options for July 16 at either the $170 or $175 strike price. On Friday, I noted that the spread between the two options seemed especially large at 38.4% and that I’d wait for Monday trading to give me more of a clue on which option to prefer. Today I’m going with the $170 July 16 Call Options (DIS210716C00170000) because with today’s drop to $170.01 they remain slightly in the money and I think they’re more likely to give me a significant gain during the life of the option.
I’ll be buying Call Options on Disney for the Volatility Portfolio on Monday–even if I won’t know the exact option until Monday morning’s trading
Shares of Disney (DIS) dropped like a stone when the company reported after the close on May 13 that subscriptions to its Disney+ streaming service fell short of Wall Street projections for the March quarter. The shares closed at $178.37 on May 13 before the report and then opened the next morning at $169.57. They recovered some ground during the day and closed at $173.70 on Friday, May 14, down another 2.60% on the day. I’ve been arguing recently and repeatedly that I think Disney is one of the best stocks to own for a post-vaccine recovery economy. Sure, the subscription gains for Disney+ are likely to slow now that we’re not all locked in our homes and going stir-crazy. But the company’s most profitable unit–the big entertainment parks have been just about shut down during the pandemic and the California parks just started to reopen at the very end of April. I see the drop on the March quarter results as a substantial buying opportunity.
Disney (DIS) shares tumbled by 3.64% in after-hours trading after the company reported fiscal second quarter numbers that beat Wall Street estimates on earnings but missed projections on revenue and on subscribers to the company’s Disney+ streaming service. Adjusted earnings per share were 79 cents versus a projected 32 cents a share. (For the second quarter of 2020 the company reported earnings of $1.53 a share.) Revenue of $15.62 billion for the quarter was a bit shy of Wall Street projections of $15,85 billion. The big miss came in subscription growth for the company’s paid streaming service. Disney+ topped 100 million subscribers for the first time–just 16 months after the late 2019 launch of the service. (Competitor and streaming leading Netflix had 208 million global subscribers at the end of its most recently reported quarter.) The stock dropped on the news, however, since analysts had been looking for 110.3 million subscribers by the end of the quarter.
This won’t help an already nervous market one bit. Today, April 20, after the close Netflix (NFLX) reported first-quarter subscriber growth way below projections. The stock was down 1.21% in after-hours trading as of 4:30 p.m. New York time.
Can you say “Pent up demand?” Theme parks in California began reopening this month of the first time in more than a year. Restrictions limit visitors to state residents and the parks are allowed to operate at just 25% of capacity. And they’re selling out.
Disney postpones release of Black Widow in movie theaters–what does that tell us about the post-vaccine economy?
A couple of weeks before Christmas, Disney (DIS) decided that the pandemic coast would be clear enough by May for it to send Black Widow, the next Marvel universe potential blockbuster–to movie theaters in May. Not so far, the company has now decided. With rates of infection rising again across the country, Disney has decided to push the theatrical release of Black Widow, starring Scarlett Johansson, to July.
Disney shares drop 1.7% today as traders take profits after yesterday’s beat on fourth quarter earnings and revenue
U.S. GDP growth slowed in the fourth quarter, gaining just 1% from the third quarter. For the full year the U.S. economy contracted by 3.5%. That makes 2020 the first time that the economy has contracted for a full year since 2009 and the Great Recession. At the bottom of that recession that economy contracted by 2.5%. 2020 is also the worst year for economic growth since 1946 when the economy shrank by 11.6% as the country demobilized after World War II. Consumer spending slowed in all 15 categories tracked by the Bureau of Economic Analysis. The sectors that had powered the recovery in the third quarter–restaurants and hotels, for instance–reversed. The growth in spending on cars and health car also slowed from the acceleration in the third quarter. So why is this good news as far as the stock market is concerned?