I don't claim that the deal isn't good for Disney. All the reasons stated, execept the last are all reasons why Disney should buy Pixar. If I were a Disney stock holder, I'd say full steam ahead, might even say pay more! But as a Pixar stockholder, aside from the perception that the numbers are "greatly inflated", there's not as compelling argument.
Yes, Disney is a great name, but look back at the last decade. Without Pixar, they would be beat by Dreamscape! Pixar had to make a terrible deal initially to first prove itself with Disney, then they re-negotiated a 5 film deal, but got screwed by Eisner (i.e. Toy Story 2 didn't count, so why produce Toy Story 3?). The don't own any of their film or character rights (Disney does). They may have limited video and rerun rights, if I recall correctly, but split with Disney. They don't have any merchendising licensing revenue (toys, cartoons, McDonalds, etc).
Going forward alone, they would have many more sources of revenue, and their value reflects that expectation. If you were to calculate how much Disney has made off Pixar, you'd find that Pixar is worth more than $6-7 Billion. So, together they'd certainly be a great, but it's Disney that needs this deal going forward. All Pixar stockholders get is a little cash early with the security that it doesn't go down, but they give up future potential in the company (no owning Disney isn't the same). As a stand alone company, Pixar can be the next Disney in animation.
There was a recent writeup that Jobs is not the best timer for stock value. He traded in some hundres of million of options 2003 that appeared to be worthless that today would be worth $3.5 billion. He got in exchange fewer options in the money that are worth about $800 million today. Let's hope it's not that kind of unlucky timing that's in store for Pixar stockholders right now.
Well, it is Jobs company, and it's convincing him what it's worth and what it's in it for him. Let's hope he's got part of his eye on what's best for stockholders given that he's one, but there are outside considerations. Anyway, his interest in Disney can help his other company, which I do have an investment in. If the deal does go thru, as it's looking to do, Disney stockholders should be very happy. Well, I guess being in the "Happiest Place On Earth"(tm) can't be that bad for all the Pixar folks. |
