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What Can Disney Do to Overcome The Devastating Impact of COVID-19

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Disney News

The spread of COVID-19 is inevitably resulting in altered consumer behaviour as people are facing unforseen drastic measures such as isolation and social distancing. And it will also change how companies do business, both short-term and long-term as nothing will ever be the same. In order to contain the spread, governments around the globe have closed up the entertainment and performance industry as they made social distancing mandatory. One of the companies which was severely hit by these measures is The Walt Disney Company (NYSE:DIS).

A bad movie Disney has found itself in

During the previous couple of days, the legendary company was forced to close its entertainment parks, cancel its luxury cruises, halt its production and postpone movie premieres. The financial consequences of these decisions can already be seen in the dramatic drop of its stock as the company lost one third of its value. But on the other side, the iconic House-of-Mouse known to everyone across the globe is stronger than and its show must go on. But this remains as a beyond painful time for Disney as the company is looking for ways or atleast segments to amortise this unforeseen blow.

Looking for a piece of light in all this darkness

Social distancing could favourably affect the development of one segment and it is streaming, Disney’s newest addition to its portfolio. Overall as an industry, streaming can only benefit as people are forced to stay in their homes. And due to these circumstances, Disney Plus which was launched in November last year could expand more quickly than initially expected. Even before all this chaos started, its subscriptions already went up the roof as the company reported on February 4 to have suprassed 28 million subscribers. And we shouldn’t forget that Disney also has Hulu which has over 30 million users which can only add up to its development potential during these everything but ordinary times.

Who is Disney up against?

The biggest player on the streaming throne is the streaming pioneer Netflix (NASDAQ:NFLX) with 169 million users and revenues of $20 billion. Before its debut into streaming, Disney and Netflix had an exclusive alliance which was naturally canceled, with Disney taking all its content with it and officially declaring war. But then there’s Amazon (NASDAQ:AMZN) with 97 million users which is far behind the streaming emperor. But Amazon and Disney remain more competitive in the price category, but Netflix earned its reputation in this segment fair and square and therefore gained its ability to charge more. But the company for which investors can really breathe a sigh of relief, as easy as one can breathe during all this, is the streaming provider Roku (NASDAQ:ROKU) as after the close on Monday, it was reported that Morgan Stanley (NYSE:MS) was offering 6 million shares of Roku, but it turned out it was acting as an intermediary for Fox (NASDAQ:FOX) which retained its news and sports division after a massive sale one year ago when no one other than Disney bought its movie studio and television channels. Roku shareholders that have seen the stock fall a whopping 65% from its all-time highs can be relieved as this wasn’t a warning sign and bad prognosis for streaming but rather a panic sale for a specific purpose.

Disney’s best bet

Besides the competitive price, Disney has another powerful weapon up its sleeve: it is a brand adored by everyone. It appeals to all age limits and is the number one choice for families around the globe without exception. Heroes that marked our childhoods could be what it takes for users to choose Disney over others. Maybe we won’t be able to hang out with them in Disney’s theme parks and cruisers, but they are always there for us when we put our favourite cartoon on. And kids can still dress up as their heroes, get a fluffy toy or a range of toys from Disney’s online shop -as kids can afford to be kids! Actually, all of us could afford it now considering we are stuck in our own homes as no one other than family can see you and think of you as an idiot , here’s atleast one way to be more positive about all this! But as for Disney, even though positive results don’t have a shot at making an appearance on its  financial statements anytime soon, at least streaming could make things less bitter!

This article is not a press release and is contributed by Ivana Popovic who is a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . Ivana Popovic does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com Questions about this release can be send to ivana@iamnewswire.com

BenzingaEditorial

Oil Giants Have Contrasting Approaches to the Crisis

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oil industry stocks

The oil industry was already under pressure due to the climate crisis and increasing regulation from governments to cut emissions. Now, many are wondering if the coronavirus is the last drop that will kill the oil industry and help save the planet. Analysts say that the oil and gas industry will never be the same. Without any exaggeration, oil is facing the gravest challenge in its 100-year history. Oil giants have been pushed to ‘survival mode’ and an environment of pure carnage due to plunging demand and a destructive price war.

Unprecedented times

With some labelling the situation as “apocalyptical”, the least lurid description is “unprecedented”. Oil prices have been the lowest in almost two decades, with even worse potentially on the way. This latest cyclical oil shock is hitting an industry whose days are counted. But the world’s economy and infrastructure is still heavily invested in fossil fuels to a truly staggering level. This means oil has enormous inertia. Moreover, the aspects that made us rely on oil during last hundred plus years are still around because it is still a powerful way to produce and transport energy.

The answer of Oil Giants

Dividend Aristocrats are still betting their future on oil

Chevron Corporation (NYSE: CVX) is continuing to drill for oil. Chevron and Exxon Mobil Corporation (NYSE: XOM) are certain they can still bring in a few profitable years while their European rivals are betting their future on renewables. Chief Executive Officer Mike Wirth believes the energy business is simply undergoing another of its natural transitions. Chevron is not focused on replacing oil, but rather at making oil and gas more efficient and more environmentally benign. This isn’t surprising as it is coming from someone who profits from the status quo.

It’s a multibillion-dollar gamble that would have been less surprising before the pandemic turned the whole world upside down. The risk is that the industry’s mightiest could end up being left behind by producing a lot of climate-endangering oil and gas that no one wants or needs. Wirth insists he’s comfortable with that risk, because he finds that this energy transition is simply “misunderstood.” Exxon has also reiterated its commitment to being oil’s last man standing decades from now.

Chastened BP committed to dramatically reduce oil and gas production

In sharp contract, BP p.l.c. (NYSE: BP) announced dramatic steps to address climate change on August 4. This strategy includes an unexpected vow to reduce oil and gas production 40% over the next decade. Its CEO admitted its strategy was greatly influenced by the COVID-19 crisis.

Contrasting public approaches

So far, Chevron and Exxon’s approach to climate change is in contrast to those of BP, Royal Dutch Shell (NYSE: RDS-B) (NYSE: RDS-A) and France’s Total S.A. (NYSE: TOT). All three have committed to speed up their shift to cleaner fuel sources. The aim is to align with the Paris climate agreement and become “carbon zero” by 2050.

On the other hand, Chevron and Exxon have pledged to sustain their dividends unlike BP and Royal Dutch Shell Plc that were forced cut their highly prized dividends due to the low oil prices.

Chevron and Exxon claim to support the goals of the Paris Agreement by reducing emissions, but they haven’t committed to a zero-carbon footprint. They plan to reduce emissions from their own operations but not those of their products. Their position is also politically easier in the U.S., where fossil fuels count on significant support from the Congress. Chevron and Exxon are simply avoiding the switch to a field where they have little expertise and where they perceive returns to be lower.

Business of oil may never return to ‘normal’

Shell CEO Ben van Beurden recently suggested that the oil business might never recover. BP’s Bernard Looney didn’t rule out the possibility that post-pandemic demand has already peaked. Those are horrifying news for companies that used to thrive as providers of a scarce resource that underpins the global economy. First of all, the resource is no longer scarce because of shale. BP even lowered its forecast it made two months ago by predicting that over the upcoming decades, crude prices could trend as much as 20% lower than initially thought.

Natural gas could be the answer

Natural gas is cheap these days. Its supplies also seem larger than oil reserves. Many experts are betting on natural gas to be our largest electricity provider. It is a perfect complement to solar and wind power. This is why it also makes sense to run cars on it. EVs are cleaner but their production also has an environmental footprint so they cannot solve all our problems. Another possibility is to use coal-to-liquid processes, just like what Germany did during WWII. But, it is a dirty and expensive way to increase supply. Rest assured, oil giants will explore any opportunity to keep the business afloat.

The solution could be gradual

A key question is whether the taken action is capable to alter the course of the climate crisis. Many experts are optimistic believing that the switch to renewables will provide the atmosphere the opportunity to gradually heal. The most enthusiastic ones believe 2019 will go down in history as the peak year for carbon emissions. But there are also pessimistic opinions that the fossil fuel industry will come back from the dead and that low oil prices will slow the much-needed transition to renewables.

Outlook is uncertain

Experts, including Jeff Currie at Goldman Sachs, are certain the climate change debate will take an entirely new direction. But exactly how will that look like remains to be seen. The first question is how long is the COVID-19 crisis going to last? And no one really knows the answer. But it is certain that these challenges combined are permanently altering the oil industry.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

Five Stocks That Have You Covered for EV Developments

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Electric vehicles

While lockdowns have been in place around the world due to the coronavirus pandemic, many people only ventured out on four wheels when they needed to get groceries. The International Energy Agency reported that at the end of March, road transport was down by half. Naturally, new vehicle sales have suffered. What is intriguing is that this has mainly affected cars with internal combustion engines produced by traditional automakers such as General Motors (NYSE: GM), Ford Motor (NYSE: F) and Fiat Chrysler Automobiles (NYSE: FCAU).

EVs resisted

But despite the drop in its biggest market, China, the demand for electric vehicles held up rather well. Germany topped the bill with a 148 percent increase according to Bloomberg, but then again, EVs are central to its recovery plan. Although the majority of us immediately thinks of Tesla Inc (NASDAQ:TSLA) that is showing no signs of stopping as it delivered its fourth consecutive quarter of profit despite the pandemic-induced havoc, there are other EV stocks to keep an eye on.

EV Charging Network

Miami, Florida-based Blink Charging (NASDAQ:BLNK) owns and operates an EV charging network across the U.S., Dominican Republic, Greece and Israel. It operates, maintains and tracks those EV charging stations through a cloud software.

Over its first quarter, the company enjoyed a solid growth as its revenue of $1.3 million increased 125% on a year-over-year basis. Its gross margin also improved from 9.3% to 23.8%.

Blink’s international expansion continued with its second quarter as $2.9 million in revenues during the first six months of 2020 surpassed full year 2019 revenues of $2.8 million. Product sales of EV charging equipment increased more than 350% with overall 2020 revenues increasing 120%. But it still has a long way to go to profitability as net loss amounted to $3.0 million.

A different EV

Canada-based Electrameccanica Vehicles (NASDAQ:SOLO) sells a somewhat different EV. The Solo EV might look like a regular car from the front but it has only one wheel at the back. It is a single-passenger three-wheeled, battery-powered electric vehicle that the company markets as a short-range vehicle for commuting. The Canadian group plans to expand with a plant in the U.S. In early June, it narrowed its choice to five states. Electrameccanica could easily become an acquisition target in the future. But for now, it is still a company with minimal revenue.

Exchange traded fund to cover anyone building a strong presence in the EV space

Global X Autonomous & Electric Vehicles ETF (NASDAQ:DRIV) is an exchange-traded fund that seeks to invest in companies involved in the development of autonomous vehicle technology, electric vehicles, its components and materials, such as batteries, software and hardware.

It has 75 holdings with net assets close to $30 million. Since we are still on the first pages of the EV book, many of these funds resemble broader tech ETFs. The fund’s top three holdings are none other than Apple (NASDAQ:AAPL), Nvidia (NASDAQ:NVDA) and Microsoft (NASDAQ:MSFT). Tesla is also in there, of course, but in seventh place. The top ten companies account for almost one third of the fund. Year-to-date, the fund is up about 9% and it hit an all-time high of $16.25 less than a month ago.

Exchange traded fund focused at battery technology developments

Global X Lithium & Battery Tech ETF (NYSEARCA:LIT) has 43 holdings with net assets close to $690 million. It focuses on the whole lithium cycle: from mining and refining the metal, all the way through battery production.

The main disadvantage of EVs is their hefty price tag. This figure is greatly influenced by the cost of the car battery. This is an area where lithium-ion batteries are heavily used. Therefore, anyone who believes in electrification should keep track of the developments on this front.

The fund’s top three components are Albemarle (NYSE:ALB), Tesla, and LG Chem (OTCMKTS:LGCLF). They comprise approximately 22% of the fund. More impressively, the fund is up over 37% year to date and  has hit a 52-week high at $38.71 just a month ago.

Solar power to accessorize super EVs

Worksport (OTC: WKSP) is soon to debut its line of its innovative pickup truck tonneau covers in the U.S., its biggest market.  The company’s TerraVis innovative technology has the potential to disrupt the overall automotive market as it integrated solar power into its tonneau covers. Its generator can store energy and increase the driving range of the vehicle. Moreover, Worksport’s pricing will make this complex technology affordable and accessible. Considering pickups are the #1 vehicle in the US and tonneau covers its #1 accessory, Worksport could have an interesting growth potential ahead.

Technology advancements ahead

Automakers need to find out a way to achieve economies of scale to make EVs more affordable and build a massive charging infrastructure all over the globe, which is perhaps an even more daunting task. But these stocks have what it takes to lead the way into electrification with new technological developments.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

Lyft Vs Uber Is No Longer the War We’re Interested In

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Uber Stock News

On Wednesday, Lyft Inc (NASDAQ: LYFT) reported its second quarter results for the period that ended on June 30th. This was its first full quarter during the pandemic that ended the life we knew practically overnight. Not surprisingly, Lyft reported a dramatic revenue drop of 61%.

The full furry of the pandemic

The second quarter parked more than 17,000 airplanes as April passenger volume dropped 90%. Skies were empty, but so were streets and hotels. Hotel occupancy fell to 24.5% which is a US record low. World cities were quarantined. Bars, restaurants, cinemas, theatres and all popular destinations such as Walt Disney’s Corporation (NYSE: DIS) theme parks were entirely shutdown. Companies were managed from home, so employees had no need to commute by rideshare. Business travel, a growing part of the rideshare industry, is predicted to drop over 35% this year.

Lyft’s results

During the second quarter, Lyft delivered a net loss of $437.1 million. The company at least managed to beat Wall Street expectations of 99 cents per share with adjusted losses of 86 cents. Revenue of $339 million also exceeded Refinitiv’s estimate of $336.8 million. With 8.7 million active riders, it achieved a revenue per rider of $39.06. Although it did not offer any guidance, Lyft expects to achieve profitability on an adjusted basis during the fourth quarter of the following year. Unlike its primary competitor, Uber Technologies Inc (NYSE: UBER), it does not have a food delivery, freight or investments and operations overseas to help it make up for losses in travel and transportation. Thanks to Uber Eats that doubled during the pandemic, Uber managed to exceed analyst expectations. Revenue did decline, but the increased demand for its diversified services greatly amortized the blow.

But a rare bright spot for Lyft is that rides in July increased 78% compared to April. This figure provides a glimmer of hope for the undergoing quarter. But despite the good news, these 8.7 million active riders will now need to be classified as ‘employees’ which brings a whole new set of issues.

Both ride hailing giants lost the battle against CA

Uber and Lyft’s war against California is far from over but they lost the first battle. On Monday, San Francisco Superior Court judge issued a preliminary injunction requiring the gig-economy companies to reclassify their drivers as employees. This means that their drivers will be entitled to minimum wage, unemployment insurance, workers’ compensation and paid sick leave.

President and co-founder of Lyft, John Zimmer, said during the earnings call on Wednesday that the company may need to suspend its ride-hailing operations in California which makes about 16% of its rides starting on August 21 if a court does not overturn the ruling which enacted the Assembly Bill 5, commonly known as the ‘gig-workers bill’.

Reclassification of independent contractors to employees would result in higher prices, fewer available rides and hundreds of thousands of drivers losing their jobs. The resulting wages and benefits would also cost both companies, neither of which are profitable, hundreds of millions of dollars.

The future after the pandemic

Like with many travel-related industries, the demand for rideshare seemed to have disappeared into thin air back in April with Lyft and Uber seeing a severe drop between 70% and 80%. Although things are improving with eased social distancing measures, we are still far from winning the battle against COVID-19. The underlying concern is whether the fear of infection has forever changed the demand for the rideshare model? Only one thing is certain – we’re in for an entirely ‘new normal’ even once we put this pandemic behind us. Moreover, no one knows exactly how will this new normal look like.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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