Disney stocks appear on promises of the reopening of California Disneyland
Minnie Mouse during the new Magic Happens Parade on Main Street USA at Disneyland in Anaheim, CA on Thursday, February 27, 2020.
Jeff Gritchen | Orange County Register | Getty Images
Disney shares rose 6.3% Monday after California tabled new guidelines for reopening amusement parks in the state on April 1.
The rally increased Disney’s market cap by more than $ 21 billion to $ 366.5 billion.
Disneyland and other California parks have been closed for about a year due to coronavirus-related restrictions, even though other states like Florida have allowed parks with limited capacity to reopen. Disney has not yet set 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 guidelines allow amusement parks to reopen from April 1, with a capacity of 15% to 35%, depending on the spread of the virus in the community. Masks and other health precautions are required.
The shutdown resulted in Disney laying off tens of thousands of workers and limiting an important source of income for the media company. According to Disney, the parks and experiences sector posted a 53% decline in revenue for the December quarter, from $ 3.58 billion a year earlier. According to Disney, coronavirus-related closures cost the division approximately $ 2.6 billion in lost operating income in the quarter.
Officials are more optimistic about returning to normal as more people are being vaccinated against Covid-19. The Centers for Disease Control and Prevention said Monday that people who have been fully vaccinated can safely meet indoors without masks. While California’s parks have remained closed to visitors, Disneyland recently began supporting public health efforts by serving as a vaccination center for citizens.
In addition to the theme park news, Disney could also get into the movie business. More theaters have opened in North America, according to Comscore, with 45% of theaters in the region opening last weekend, compared to 42% the previous weekend.
The move came on a mixed day for the markets, with many tech and social media companies falling while some traditional media companies rallied. For example, ViacomCBS shares rose 12.7% to a new 52-week high and Discovery shares rose 4.7%.
As traditional media bounced back on Monday, Netflix shares fell 4.5%
Disclosure: NBCUniversal is the parent company of Universal Studios and CNBC.
– CNBC’s Sarah Whitten contributed to this report.
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