This has been know as very likely for some time, but Disney has officially stated it’s intent to exercise its option in its contract with Comcast to purchase the remaining 33% of Hulu. Early numbers suggest an 8b valuations though the contract stipulates a minimum value. Interestingly this will make Disney a competitor in the live TV space which has had slowing growth over the years, but is now looking potentially more desirable as streaming services raise prices. The bear thesis has been that revenues will continue to decline in linear segments due to cable cord cutting and Disney will continue to contract as a result. The bull thesis right now is that Disney is positioning itself for expanding top line margins as a result of a focus on direct to consumer sales and expanded investment in parks and cruises, Disney’s cash cow.
For the record I am long Disney 650 shares at around $87 basis.
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