Disney shares pop about promise to reopen Disneyland in California

Minnie Mouse during the new Magic Happens parade on Main Street USA inside Disneyland in Anaheim, CA, Thursday, February 27, 2020.

Jeff Gritchen | Orange County Registry | fake images

Disney shares rose as much as 5% in late trading Monday after California provided new guidance that allowed the state’s amusement parks to reopen on April 1.

The rally is set to add more than $ 15 billion to Disney’s market capitalization, bringing it to around $ 360 billion.

Disneyland and other parks in California have been closed for about a year due to coronavirus-related restrictions, even as other states, like Florida, have allowed parks to reopen with limited capacity. Disney has yet to provide a reopening date for its California parks, but Disney and other theme park owners, including Universal Studios owner NBCUniversal, have asked California officials to allow a limited reopening.

The new state guide allows amusement parks to reopen beginning April 1 with a capacity of 15% to 35%, depending on the prevalence of the virus in the community. Masks and other health precautions will be required.

The shutdown led Disney to lay off tens of thousands of workers and slashed a major source of revenue for the media company. Disney said its parks and experiences sector saw a 53% drop in revenue in the December quarter compared to last year, to $ 3.58 billion. Disney said the coronavirus-related closures cost the division about $ 2.6 billion in lost operating income for the quarter.

Officials are becoming more optimistic about a return to normalcy as more people get vaccinated against Covid-19. The Centers for Disease Control and Prevention said Monday that people who have been fully vaccinated can safely gather indoors without masks. While its California parks have been closed to visitors, Disneyland recently began helping the public health effort by serving as a vaccination site for residents of the state.

In addition to the theme park news, Disney could also make a profit in its movie business. More theaters have opened in North America, with 45% of the region’s cinemas open last weekend, compared with 42% the weekend before, according to Comscore.

The move came on a mixed day for markets, with many tech and social media companies falling, while some traditional media companies rebounded. For example, ViacomCBS shares rose as much as 8% and Discovery shares rose more than 2%.

Disclosure: NBCUniversal is the parent company of Universal Studios and CNBC.

– CNBC Sarah Whitten contributed to this report.

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