Disney Stock Is Rising Tuesday: What's Going On?

Walt Disney Co. DIS shares are trading higher Tuesday after the company announced it will pay Comcast $438.7 million to acquire the company’s 33% stake in Hulu.

What To Know: Disney will take full control of streaming service Hulu, ending a multi-year valuation dispute. Disney acquired majority control of Hulu through its 2019 deal with Fox Corp. In 2023, the company announced plans to buy the remaining 33% from Comcast.

Disney said in a regulatory filing that the two companies agreed to an initial minimum price of $8.6 billion, which Disney paid for Comcast's stake in 2023. The companies then entered into an appraisal process to determine the final price, but differing views on Hulu's valuation led to a drawn-out appraisal process.

“During the initial phase of the appraisal process, Disney's appraiser arrived at a valuation below the guaranteed floor value, while NBCU's appraiser arrived at a valuation substantially in excess of the guaranteed floor value,” Disney said in the filing.

The final equity value, which was completed on June 9, took into account a valuation from a third appraiser. Disney said that if the valuation had been consistent with the Comcast appraiser’s value, Disney would have owed an additional $5 billion. Instead, it was determined that Disney owed approximately $439 million, which is being viewed as a win for the entertainment giant.

"We are pleased this is finally resolved. We have had a productive partnership with NBCUniversal, and we wish them the best of luck. Completing the Hulu acquisition paves the way for a deeper and more seamless integration of Hulu's general entertainment content with Disney+ and, soon, with ESPN's direct-to-consumer product, providing an unrivaled value proposition for consumers,” said Bob Iger, CEO of Disney.

The acquisition of the remaining 33% stake in Hulu is expected to close by July 24, giving Disney full control of Hulu's operations and content. Hulu has about 54.7 million subscribers, according to Disney’s latest earnings report.

Loop Capital analyst Alan Gould maintained Disney with a Buy rating on Tuesday and raised the price target from $125 to $130.

DIS Price Action: Disney shares were up 2.66% at $118.78 at the time of writing, according to Benzinga Pro.

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