The Walt Disney Company is an international media conglomerate with business in the television, movies, merchandise, and theme parks. Its worldwide brand recognition and popularity stems from its founder Walt Disney’s emphasis on innovation and story-telling. With such strong emotional equity with the public, many are eager to be part of the company in a way through stocks. The Walt Disney Company has a range of securities available to the public, such as shares of stock and senior debt securities. Securities may be purchased by individual investors through agents. The Walt Disney Company determines the amount available for sale every year based on its current debt to support future projects and initiatives (Vogel, 2014).
The Walt Disney Company Investment Plan offers direct stocks and reinvest dividends to purchase new shares (Walt Disney Prospectus, 2008). General securities are offered under indentures and can be offered from different times and series determined by Walt Disney Company. The debt securities of any series are the company’s own unsecured obligation.
The Walt Disney Company offers several forms of debt for sale, like senior debt securities and subordinated securities. (Walt Disney Company Annual Report, 2008). Preferred stock is available for sale as well as fraction of stocks for current stockholders. Common stock is also available and made explicit within the prospectus. Individual investors, through their agents, can decide to combine securities or manage them individually.
The Walt Disney Company is a master of marketing its products, and its marketability of its debts and stocks is no exception. Timely notes are distributed that link to the principle that is payable determined by the reference of commodity in the pricing of a supplement. The company also distributes amortizing notes where the payment of the principle and interest accruals is given in regular installments.
In 2008, The Walt Disney Company offered $11,351 million dollars for sale to the public. In 2010, the company offered just $10,130 million dollars. Obviously, there was more debt in 2008 than in 2010 for the company; it showed a decrease of almost 23%. This is due to change in focus of the company as well as fiscal management changes.
By 2008, company management has changed and there was a renewed focus on improved money management and reduction of long-term debt, including short-term and long-term debt obligations. This reduction improved the company’s total equity and its perception as an industry market leader. This reduction of debt was a testament to Walt Disney Company’s improved and continued success amongst a tough economy and strong competition.
In 2008, sales reached $4,427 million dollars and in 2010 it decreased to $3,963 million dollars. As evidenced by this change, there were a distinct shift in trends. From 2008 to 2009 there was a drop and a decrease of 25%. From 2009 to 2010 there was an increase of $656 million or nearly 20%. Regardless, the sales throughout were profitable for the company and helped fund its continuing endeavors, including acquisitions of other media companies like Pixar and Marvel soon after (Price, 2009).
Revenue did decrease from 2008 to 2009 but completely recovered in 2010, gaining almost a full percentage point compared to 2008. The highest net profits were reached in 2008 due to the sheer amount of debts offered and the much smaller amount offered in 2010. As the company became more profitable, less was offered for sale, reducing net profits but showcasing the company’s success and security.
Unique challenges faced the company, such as a slowing of its direct to video business, usually a profitable subsect, and a United States recession which limited consumer spending and theme park attendance. Through a challenging time in the nation’s economy, the Walt Disney company continued to reevaluate its strategies, adjust accordingly, and return to higher profitability.
Net proceeds from the sales of securities were used by the Walt Disney Company to fund its corporate endeavors and new acquisitions and developments. Sales proceeds reduced the company’s short-term debt and was used to acquire new franchises, such as the Marvel brand which was acquired in 2009. This purchase has become enormously successful for the Walt Disney Company over time, with blockbusters like Avengers and Ironman both at the box office and through merchandise, improving the company’s overall profits (Goldman, 2009). From 2008 to 2012, debt reduction and profitability allowed Disney to continue high-profile acquisitions, including LucasFilms in 2012 for $4 billion. This has many extensions for Disney, from movies to theme park additions, with expectations that this will once again be a major profit-builder for the company.
Other portions of net proceeds have been invested to prepare for future use, such as difficult times or timely acquisitions. The company’s funds are used judiciously, but the company’s needs change regularly. From the 2008, the Walt Disney Company did use the funds as proposed, reducing debt and investing wisely for future financial growth.
As a national leader in the multimedia industry, the Walt Disney Company continues to grow and expand and has offered different securities and stocks as appropriate. By offering various securities, the company ensured it had a viable market available to for maximum profit. From the 2008 prospectus compared to company performance just two years’ later, the company showed significant progress, reducing debt and increasing cash flow than funded significant projects and acquisitions.
