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Notes -
Things that are true:
They stretched their balance sheet to by 20th Century Fox, raising their debt to $45 billion to close the transaction. They have quite a bit of breathing room on the maturity and they obtained it under quite low rates, but that's a lot of debt.
They have to buy out Comcast from Hulu, making the payment in 2024, but the price is subject to debate. Still this is likely to be a substantial cost in the $15-20 billion range.
The Little Mermaid is posting dissapointing numbers especially internationally. Compare the box office to date to the Lion King at similar points which grossed $1 billion outside the US.
Nelson Peltz is an activist investor whose position is strengthened by these struggles and should he succeed will get more cash for shareholders from the company.
Now onto judgment calls:
Net working capital (the source of the $200 million) isn't the best tool for judging liquidity.
Acid test ratio (the ratio of just cash and liquid current assets over liabilities) isn't great, at 0.3 but most big businesses use current liabilities to fund a lot more than intended. This isn't as solid a measure as it once was.
More concerning is Altman's Z score which is a loose prdictor of bankruptcy at 1.94 that's pretty poor for a major company (compare Tesla, Alphabet, and Meta in the double digits where over 3 is good). It's not the worst in their industry (AT&T which bought TimeWarner recently is much worse at about 0.4).
All of these do indicate that Disney is going to have some very tight belts for a while especially if their tentpoles underperform (especially given the expectations that the new Indy film is unlikely to outperfrom).
Hearing Peltz health is in serious decline. So probably eases up on them a lot.
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