Stock Value of Netflix Surpasses That of Disney

Netflix’s value on the stock market ballooned on Thursday to a new record high of $153 billion and passed that of Walt Disney Co. for just the first time and making it the most valuable entertainment company in the world. This has come following a huge shift by consumers away from cable television and cinemas.

Lifted by loads of original programs and more than 125 million subscribers worldwide, some who have chosen to stop watching cable television, stock at Netflix has surged almost 80% thus far during 2018, which is more than any other S&P 500 company.

Since the initial public offer offering in 2002 for Netflix, when it was just a DVD mail-order service, its shares have soared by almost 33,000 percent. It is also a must-own stock for investors on Wall Street along with the likes of Amazon.com, Apple, Alphabet and Facebook.

Netflix’s stock Thursday was up 2.3%. Disney stock has dropped by more 5% over the last year as it along with other one-time leaders in the entertainment industry struggle in adapting to the shift by viewers across the globe to video content online.

Disney owns some entertainment brands that are the most valuable in the world, including Pixar Animation, Star Wars and Marvel.

It also operates highly popular theme parks across three continents and has submitted an offer to acquire assets from 21st Century Fox for the price of $52 billion.

Disney, with a value of $152 billion on the stock market, is starting a streaming service of its own for families and said it would stop supplying Netflix with any new movies beginning next year.

In early May, the market capitalization of Netflix overtook Comcast the leading cable operator in the U.S., which owns Universal Pictures and NBC.

Comcast, with a $145 billion stock market value, confirmed Wednesday that it is preparing a rival bid for media assets of 21st Century Fox setting up a big bidding war against Disney.

AT&T and CNN’s parent Time Warner, which are trying to win approval for a merger, have a combined $274 billion market capitalization.

Investors believe in the ability of Netflix to add more subscribers across the globe, and are paying high prices to own stock in the company.

Recently Netflix was trading at more than 98 times its expected earnings for the upcoming 12 months, versus Comcast and Disney at 14 times their earnings.

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