Spending Disney’s Capital

The big news this week is that The Avengers has already crossed the $1 billion mark… in just two weeks. Mad Money caught my attention while I was leaving work today; because Jim Cramer was chatting with Disney CEO, Bob Iger.

Disney’s top executive addressed how they are looking at returning value to shareholders. Despite the utter failure that was John Carter (the studio reported an $84MM operating loss this quarter), Disney’s total earnings rose 29% this quarter over last year’s second quarter.

Interestingly, Iger commented that DIS stock is undervalued. It should be noted that Iger recently sold $81.6MM worth of shares (1.8MM shares)… however, he still owns 1.14MM shares.

Jim Cramer speculated a bit on what Disney would do with its new Avenger’s capital. Should they put the money into more acquisitions like Marvel; build new cruise ships; new parks, attractions, and/or resorts?

In my opinion, Disney should build some new Disney Vacation Club (DVC) resorts.

Disney currently has DVC resorts near all six of their North American theme parks; as well as Hawaii, Hilton Head, and the sleepy town of Vero Beach, FL. Where might Disney build next? Some may say its time for Disney to move DVC into Europe or the Caribbean; but I would disagree. Building in Europe is very expensive and the US Dollar just doesn’t stretch as far as it used to. Smart money is to either move east (Japan or China) or to keep the resorts local.

My vote is for a ski lodge in Vermont (and I don’t even ski). Disney’s already done the research – granted, that was fifty years ago. How cool would it be to finally dust off Walt’s plans and put them to some use? There’s also an upside to building a ski lodge resort in Vermont; rather than the Sequoia National Park: location. There’s quite a bit more to do in Vermont, year round, compared to the Mineral King basin.

Of course, I could be wrong – Vermont may already have an abundance of quality skiing resorts. My second choice would be historic Williamsburg, Virginia; but Nantucket seems like a natural choice as well.

What are you thoughts? Are more DVC resorts in the near-future? Where would you spend all of Disney’s new capital?

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