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Should Disney Investors Be Concerned About Hurricane Matthew?

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Should Disney Investors Be Concerned About Hurricane Matthew?
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Florida residents are bracing for the landfall of Hurricane Matthew on Thursday and Friday.

While Floridians are preparing for the potentially devastating winds and rain from the strongest Florida hurricane in years, Walt Disney Co (NYSE: DIS) shareholders are preparing for potential damage to Disney’s share price.

Orlando, which is home to The Walt Disney World Resort, is expected to be hit hard by Matthew. Despite Orlando’s inland location, Orlando’s News 6 meteorologists are still calling for 40-74 mph winds and even higher gusts through Friday. In addition, Orlando could see 3-5 inches of rainfall (or perhaps more).

Matthew strengthened to a Category 4 storm on Thursday, and could end up the strongest hirricane to make landfall in Florida in more than a decade.

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As of Thursday morning, Disney had not officially closed Disney World Resort, but it has cancelled specific events like Mickey’s Not-So-Scary Halloween Party on Thursday.

Comcast Corporation (NASDAQ: CMCSA)’s Universal Studios has also yet to announce a park closure.

SeaWorld Entertainment Inc (NYSE: SEAS) has already officially closed its Orlando water park on both Thursday and Friday.

Disney, SeaWorld and Universal Studios all allow for free vacation cancellations and rescheduling within seven days of a hurricane warning issued in either Orlando or the traveler’s home town.

If Disney and Universal do elect to close their parks Thursday and/or Friday, it will be the first time either park has closed since Hurricane Wilma in 2005. In 2015, Disney's Theme Parks & Resorts segment generated a total of $16.1 billion in revenue. The segment accounted for roughly 30 percent of Disney's total 2015 revenue.

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