Disney Shares Gain, Resorts and Parks Start Opening

Walt Disney (NYSE:DIS) shares have struggled this year. The coronavirus outbreak has disrupted the company’s business across movie production and theme parks.

Disney shares closed at $116.85 on Monday, which left them down 19% for the year. Like Disney, many other companies’ stocks are in the red for the year. Fox (NASDAQ:FOXA) shares have fallen 26% for the year, while Comcast (NASDAQ:CMCSA) shares have fallen. Meanwhile, Altice USA (NYSE:ATUS) shares have fallen 11% for the year.

Here are the two things those investing in Disney shares need to know.

Disney shares and reopening businesses

Disney halted its theater releases and closed its resorts and theme parks around the world as a measure to curb the spread of the coronavirus. As a result, the company recorded a 10% year-over-year drop in its resort and parks revenue in the March quarter.

The resort and parks business is one of Disney’s major revenue sources. Therefore, investors dumped Disney shares due to fears that suspending operations would have a far-reaching impact on the company’s financial results.

Disney has started reopening its resorts and parks, which should bode well for its shares. The company reopened its theme park in Shanghai last week. Parts of Disney World in Florida will reopen tomorrow. In Shanghai, Disney will initially operate the park at a reduced capacity of around 30%. The goal is to ensure that guests can observe a safe social distance to curb the spread of COVID-19.

Disney shares have gained more than 8.0% since the Shanghai park reopened on May 11.

TikTok poaches Disney+ division executive

Longtime Disney executive Kevin Mayer resigned to join ByteDance, the Chinese parent of short-form video app TikTok. ByteDance has signed Mayer as its COO and TikTok’s CEO.

At Disney, Mayer headed the division that houses the company’s Disney+ video service. Disney shares popped up on the successful launch of Disney+ in November last year. Describing the service as the most important product in 15 years, Disney pulled out all of the stops to ensure a powerful debut for Disney+. The strength of Disney+ helped the company report fairly good earnings numbers for the March quarter despite the pandemic.

At this point, investors can scoop up Disney shares at over a 20% discount to their 52-week high of $153.