Mon 6/23/2008 6:08p
|This topic is for Discussion of: 6/23/08 Sell Disney World if Oil Hits $160-a-Barrel? Who Makes This Up? (True-Life Adventureland)|
Mon 6/23/2008 10:42p
|I do agree that with expensive oil it's going to be harder to make a profit, but I'm with you: sell WDW, good grief!|
Mon 6/23/2008 11:08p
|<<sell the resort to a third party>>|
What would be the asking price? Who could afford it?
Tue 6/24/2008 4:14a
|Miceage is really going over the top. WDW may have some cut backs, but they are not going to sell off. |
Tue 6/24/2008 7:24a
|The first thing I thought was what the heck is he talking about. Then I relized that he was just to far feched that it was crazy.|
To think about how much Disney owns and if that fell, how many other things would fall too. Just crazy.
Tue 6/24/2008 9:21a
|<<What would be the asking price? Who could afford it?>>|
I can think of one person who would be interested: the Oracle of Omaha, Warren Buffett.
Tue 6/24/2008 9:40a
|^^^But he only buys at a heavy discount|
Tue 6/24/2008 9:46a
|Maybe OLC would buy it?|
There is a strong tendency in modern American business to not be a "bagholder", which is to say, the owner of a depreciating or isky asset. This is why all the subprime and other junky mortgages were securitized and sold to investors. The banks collected huge commisions and someone else was left holding the bag.
Now I'm not saying that WDW is the equivalent of a subprime mortgage, but if Disney management does not believe that they can continue to earn an acceptable return on investment on the resort, then it could make sense to divest, especially of they can get a royalty income stream as part of the deal.
Tue 6/24/2008 9:46a
|isky -> risky|
Tue 6/24/2008 10:24a
|>if Disney management does not believe that they can continue to earn an acceptable return on investment on the resort, then it could make sense to divest, especially of they can get a royalty income stream as part of the deal.|
But divest to whom? Disney should be able to accept lower returns on the resort than any other prospective owner, given the synergistic effects on sales of other Disney assets. Considering any other owner wouldn't get those synergistic effects -and- they'd have to pay license fees...how in the world could this deal happen? I can't imagine who would think they could make this scenario work.