As of a couple days ago, Disney is up 31% for the year. In that same period Tesla is down 31% for the year.
Both companies are facing serious challenges: Disney has long relied on linear networks like ABC and Disney and Freeform and others for both profitable income and to spread the gospel. (It’s a lot easier to turn Moana into a Disney Princess when you have lots of distribution eyes to help.) But linear networks are collapsing along with the traditional cable industry, so that’s a problem.
Likewise ESPN has relied on the heavy tariff of cable users who paid almost $10 month for the channel whether they watched it or not which allowed ESPN to bargain high for sports rights and placement. But that, too, is going away, even as leagues start thinking about running their own operations for streaming.
Theme parks, an ever reliable segment is still doing fine, and prices go up again, and everybody seems miffed but understanding, so I don’t worry about this one too much.
And last, the movie business. They’ve gone from have the Top 5 movies in a single year to having none of the top 5 as the Superhero franchises wear out, StarWars goes small, animation is tired, etc.
And, of course, boardroom intrigue as “activist investors” push to have board seats and light a fire under Igor.
Tesla has its own set of challenges: serious competition from BYD in its largest market: China, and perhaps soon in Europe, and possibly down the road in the US via a plant in Mexico to sneak in under possible tariffs.
In fact, looming competition everywhere, coupled with a diminution of overall demand (still growing but at a far slower pace) for EVs, and growth for hybrids where Tesla does not have an entry.
It appears that the pickup will sell, but won’t be a game changer, and the company really hurts for a low-price entry which won’t be available for some time. And of course, margins on that, as well as the rest of the lineup, are far below what was being produced just a year or two ago.
There is pressure to eliminate tax breaks, and FSD now seems a pipe-dream, although Elon has mandated that every car delivered must be accompanied by an in-person demonstration of it (such as it is) before the car can be turned over. This smacks of an attempt to upsell a cost-less addition to goose margins (and it might work!), but it’s a clear change of strategy and will slow down the delivery process significantly.
And there’s the distraction factor of the CEO, of which enough has been said already.
Anyway, the battle of the 31%ers. Interesting fodder for investors.
