Shares of Disney (NYSE:DIS) stock are rising higher following a report that stated that CEO Bob Iger was looking to sell some of the company’s linear assets, such as ABC, FX and Freeform. These assets represent about a third of the company, while Iger characterized them as “non-core.” According to Wells Fargo analyst Steve Cahall, the TV assets alone could command a price tag of $8 billion.
Disney is also reportedly looking to sell or restructure Star India, its streaming and TV business in India. According to the WSJ, Disney has already engaged in talks with one bank to discuss strategic options, such as sharing costs. It’s worth mentioning that these discussions are still in the early stages, and nothing concrete has come out of them yet.
DIS Stock: Iger Hints at Asset Sales
Disney has been directly impacted by the decline of cable TV and the rise of streaming competitors. At the same time, Iger seems content with holding onto Disney’s more valuable streaming and TV assets, such as ESPN and Hulu. However, the CEO noted that Disney could possibly team up with a strategic partner to improve ESPN.
There is also speculation that Iger could sell the entire company, and if so, likely to another large capitalization company. This is a difficult scenario to imagine for many shareholders, as Iger has been monumental in building the company from the ground up as a media powerhouse. Still, tough times call for tough decisions. The speculation of the sale has made its way to Disney employees, who were reportedly experiencing “high anxiety.”
“It’s great to say he loves the jewel. It’s great to say that the jewel is important. It’s great to say that the jewel is fun,” said an anonymous Disney insider. “But he has revealed the truth: he wants to get the highest price he can for the jewel because he can’t afford it anymore.”
For now, Disney remains stuck between a rock and a hard place. The company’s streaming business is expected to lose a whopping $800 million for the recently ended quarter.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
