Disney's Fairytale Move into Streaming Hasn't Ended Yet...READ MORE
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 | | Disney's Fairytale Move into Streaming Hasn't Ended Yet | | The Walt Disney Company (DIS) is best known for Mickey Mouse, and then children's movies that invariably involve a happy-ever-after ending.
Right now, the market is pricing shares for such a happy ending following the company's announcement last week of Disney+, a new streaming service.
Starting at just $7 per month, and with a huge back catalogue of old cartoons, as well as films from the Pixar, Marvel, Lucasfilm and Fox available, it looks incredibly attractive in terms of both price and content.
That's what the company is banking on. Disney has been behind the curve to adapt to the streaming market. And given the company's history, with a huge proportion of its revenues derived from cable channels, most notably the ESPN channels, streaming has always felt like an afterthought.
Following years of declining cable subscribers, however, the big move into streaming finally addresses the issue.
But, again, this doesn't magically solve all the company's problems. It will still have a declining cable division. And growing out its streaming service will cost billions of dollars. That's especially true given the company's decision to create new original content as well, taking a page from the success that Amazon Prime, Netflix, and others have had.
Given the massive boost that shares got from this announcement, it's clear that the market has gone from a healthy skepticism about the company's prospects to being overly delighted. That's a classic market recipe to disappoint investors going forward.
In short, it's likely that shares of Disney will come back down in the coming weeks and months following this announcement. The buildout will take years, and any hiccup along the way could really impact share prices. While it's a great business, investors should wait for a better price, say, $120 per share or under.
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