Market Cap: $254.9 billion
Change from Last Year: 63.6%
This Year’s Rank: 1
Last Year’s Rank: 1
Top Exec: Robert Iger, chief executive and chairman
Headquarters: Burbank
How They Got Here: Already by far the biggest company by market cap on the Business Journal’s list, Disney got a whole lot bigger this past year with its $71 billion purchase of 21st Century Fox’s entertainment assets, which was completed in March. Disney financed that purchase with $35 billion in cash and the issuance of 343 million new shares. Often when a company issues such a large number of new shares, the price drops. But in Disney’s case, the share price rose 35% over the 12-month period ending June 28 to close at $138.78. The combination of new shares and the sharp increase in the share price drove a whopping $99 billion gain in market cap. Analysts credited the share price rise to the company’s increased focus on bringing together its digital assets, including this fall’s planned rollout of Disney Plus — which is aiming to compete with Netflix Inc. — and Disney’s majority stake in Hulu, which was acquired as part of the Fox deal. In April, Disney held a presentation for investors highlighting the company’s streaming strategy in the United States and globally. “Following a spectacular Investor’s Day, Disney has been the best-performing stock in our diversified entertainment index with a gain of 23%,” even beating the Standard & Poor’s 500 Index (up 18%), according to Marci Ryvicker, managing director at Wolfe Research in New York. All this was before Disney opened its “Star Wars” attractions at Disneyland and Walt Disney World in May.
Where They Go Next: With so much emphasis on digital and streaming, analysts and investors will be eyeing Disney’s ability to retain existing subscribers while enticing new viewers to sign on for the company’s services. Another key is whether Disney’s core studio business can keep the blockbusters coming beyond its live-action “Lion King” remake and the upcoming “Frozen 2” and “Star Wars Episode IX: The Rise of Skywalker.” And finally, there is the integration of 21st Century Fox into the Disney empire, which begins this quarter.
Quotable: “Our view has been that of all the incumbent media companies, Disney has the best chance of success due to their IP, technology and management team.” — Marci Ryvicker, Managing Director, Wolfe Research.
