Disney Buying Back $8 Billion in Stock

The Walt Disney Company recently announced plans to buy back nearly $8 billion in stock beginning next year.

The announcement was made by Chief Financial Officer Jay Rasulo at an investor's meeting in California. Disney says they expect an increase in cash flow, which is the reason behind the buy back.

In the past few years Disney has not only expanded its theme parks in Anaheim and Orlando, but has also built new cruise ships and opened a new resort, Aluani in Hawaii. And, while the company will continue to spend for projects and acquisitions - such as last year's Lucasfilm purchase - Rasulo says he expects the cash flow to increase.

The company regularly purchases its own stock, having repurchased $800 million in the third quarter of this year. To date this year Disney has repurchased $3.2 billion in its own stock.

Through the first nine months of this fiscal year, Disney has spent $1.81 billion on parks, resorts, and other properties while the company's debt total $15 billion at the end of June.

This summer's box office disaster The Lone Ranger is a $190 million loss for Disney, and is leading the company to limit the budgets on motion pictures that aren't part of a series. But, it should be noted that the next installment of the Pirates of the Caribbean franchise was recently put on hold, with some parties citing budget concerns and other citing "script issues" as the reason.

Story by Traci C., Source

Matt D wrote on Wed, 09/25/2013 - 19:45:

Matt D's picture

Want to know why the Lone Ranger was a box office flop. 4 words for you!!! Johnny Depp Supporting Actor!!! Johnny Depp should have been the lead role. You don't take a Mega Star like Johnny Depp and make him second fiddle!! Duhhhh!!!!! For such a smart Company like Disney, you really dropped the ball. I can't believe you all made that mistake!! Johnny Depp should ALWAYS be the led actor!! Stupid, Stupid, Stupid!!! 'Nough said!!!!

Tim wrote on Thu, 09/26/2013 - 01:16:

Tim's picture

What will be the expected impact on the value of its shares?

Kristen K. wrote on Thu, 09/26/2013 - 17:12:

Kristen K.'s picture

Tim - In general, markets look favorably upon stock buybacks. This however makes it an attractive business strategy during times where genuine improvements and gains may be stagnant. I feel like for Disney this marks a lull in the action as they regroup and move forward.

That being said - I'm no stock expert and anything coming from this website regarding such should only be used as entertainment and a jumping off point to begin your own deeper research.

Erica wrote on Wed, 10/02/2013 - 20:01:

Erica's picture

I´m sorry Matt to disagree but I think that the issue with the lone ranger is not that, it could have been a success if they would have not forgotten about being funny throughout the hole movie not just in the end, another problem was the length, OMG I almost got asleep in the theatre!!

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