Walt Disney stock is dropping following news that the opening of its California Disneyland location would be delayed in response to a rise in coronavirus cases in the state.
Disney (ticker: DIS) had planned to open Disneyland on July 17, but the reopening is now pending approval from the state.
California is among the states that are seeing a worrying resurgence of Covid-19 cases as it eases lockdown orders aimed at curbing the spread of the virus. This week, the state recorded its largest spike in cases yet, with more than 7,000 new infections.
Even the original July 17 opening date had met with concern that it was too soon to safely return to the Magic Kingdom, despite company assurances that it would take measures to prevent the disease from spreading. Disney has reopened parts of its Florida locations, seeking to balance the health risks against the fact that its theme parks are a key source of revenue. Having them closed has been costly.
Shanghai Disneyland was able to open after a three-month hiatus, but of course the U.S.’s response to the virus has been less strict than those of some other countries. That has led to greater spread of the disease, and presents a problem for businesses that want to reopen.
In some states, governments may revert to stricter measures to combat rising caseloads, but even in those that don’t, worrisome headlines may keep consumers away. Companies like Disney were already factoring in capacity limits as part of their health protocols, but fewer people in parks means lower sales, even as operating costs rise with the addition of safety measures.
Other companies are already shutting locations again: Last week Apple (AAPL) said stores in four states would close in response to a rise in coronavirus cases.
Disney was down 2.2% to $109.64 in morning trading.
Write to Teresa Rivas at teresa.rivas@barrons.com
https://news.google.com/__i/rss/rd/articles/CBMiamh0dHBzOi8vd3d3LmJhcnJvbnMuY29tL2FydGljbGVzL2Rpc25leS1zdG9jay1zbGlwcy1hcy1jb3JvbmF2aXJ1cy1kZWxheXMtZGlzbmV5bGFuZC1yZW9wZW5pbmctNTE1OTMwOTc0MjTSAW5odHRwczovL3d3dy5iYXJyb25zLmNvbS9hbXAvYXJ0aWNsZXMvZGlzbmV5LXN0b2NrLXNsaXBzLWFzLWNvcm9uYXZpcnVzLWRlbGF5cy1kaXNuZXlsYW5kLXJlb3BlbmluZy01MTU5MzA5NzQyNA?oc=5
2020-06-25 15:03:00Z
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