For the last six months, Disney has kept tens of thousands of employees on furlough with full health-care benefits with hopes that the restrictions caused by the pandemic would lift, allowing the parks to resume business. But as the months pass, that glimmer of hope has continued to grow smaller – and on Tuesday, it seems like all hope is gone.
The company announced that it would be laying off 28,000 employees from its theme park division. Theme parks will account for most of the layoffs, although Disney Cruise Line and Disney’s retail stores will also be impacted.
About 67% of the layoffs will be part-time jobs that pay by the hour. However, executives and salaried workers are also facing possible termination.
Where’s the money?
Disney’s theme parks in California and Florida employed roughly 110,000 people before the pandemic. The job cuts will come from both resorts.
Josh D’Amaro, the chairman of Disney (DIS) Parks, explained that this large staffing cut was needed due to the “prolonged impact” of coronavirus on business. That included “limited capacity due to physical distancing requirements and the continued uncertainty regarding the duration of the pandemic.”
Disney’s brought in more than $26 billion in 2019. But 2020 started out rocky as profits dropped a shocking 91% during the first three months of 2020. The beating continued, too – crushing the theme park in the second quarter of this year. Profits fell 58% compared to last year, and Disney reported a loss a billion dollars in profit just a few weeks into the lockdown.
But this company’s loss if your gain – and here’s how to secure your piece.
How can I get some?
Disney just joined the long list of company’s announcing that they will be laying off employees. And it further proves what I’ve been saying: there is a significant disconnect between the stock market and the economy.
We have an unemployment rate of 8.5% – and just when we think that number is going down, it surprises us and doesn’t. We see Americans struggle to pay rent, small businesses closing their doors for good, airlines struggling to make ends meet, and more. It’s clear that the bullish energy the market is feeling is not lining up with our current economic state’s sluggishness.
And I don’t think we’re near the end of it. That’s why I believe that any company that operates with a “mass” population (like a Disney theme park) won’t be recovering anytime soon. In fact, I doubt that this announcement will be the last batch of bad news that we see regarding companies like Disney- unless we see some type of stimulus package come through.
Now, no one can truly predict what’s to come – but the good news is that there’s money to be made right now – in the short term. The best (and only) way to play Disney following this news is with the power of put spreads. Put spreads allow you to not only get into a lucrative opportunity at the right price but also control your risk while you’re at it. And this strategy can deliver nice size profits, fast.
In the spotlight: A big box store renovation
Walmart continues to find its way into the headlines. And now, it’s for the impending redesign of its stores.
The big-box store aims to redesign the store to mimic its app so shoppers can more easily find what they’re looking for. This tactic pushes more people to download their app and use it while shopping (and keep them off Amazon’s app). The app can help shoppers navigate the store, search for more options, and pay once finished.
The redesign will allow Walmart’s department stores to be more organized and new; large signs will be installed to help direct customers to their needs. With this renovation, Walmart is hoping to bring more people into the store as well, as the new setups will make social distancing even easier.
The redesign will roll out to 200 US stores by the end of the year and 1,000 more by the end of 2021. This new design could not only bring in more foot traffic but could get the company’s app on more phones, where they can push more deals and target a wider audience. And that’s why I’ll be keeping an eye on this development as I could see a speedy and easy profit opportunity coming our way. And I’ll be sure to keep you updated.
There’s Always a Way
Even though layoff plans, massive revenue losses, and continued uncertainty within the industry would normally be enough to scare investors away from Disney or any other company with similar prospects, I try my best to look for profit opportunities wherever I can.
And doing so would be much, much harder without the help of my S.C.A.N. trading system…
S.C.A.N. is an algorithm I created to examine every data point and trend – no matter how small or seemingly insignificant – surrounding a certain stock.
So wherever there’s a chance to profit, we’ll find it!
Click here now to see what’s next on S.C.A.N.’s radar.