WALL STREET DOWN ON DISNEY'S WEB PLANS.Byline: Dave McNary Daily News Staff WriterWall Street turned its nose up Tuesday at Walt Disney Noun 1. Walt Disney - United States film maker who pioneered animated cartoons and created such characters as Mickey Mouse and Donald Duck; founded Disneyland (1901-1966) Disney, Walter Elias Disney Co.'s Internet plans, knocking the entertainment giant stock down 4 percent in the wake of disclosing it may buy all of Web partner Infoseek Corp. Shares of Disney, which made the announcement after the market closed Monday, declined $1.25 to $29.625, off 30 percent from its all-time high 13 months ago. The issue hit a 1999 low last week at $28.8125, then rose Friday on speculation of a major restructuring or spin-off of Internet assets. Steven Cesinger, an entertainment analyst with investment bank Greif & Co., said Wall Street's enthusiasm is clearly limited for Disney buying the 57 percent of Infoseek it does not own. Such a deal probably would cost Disney more than $2 billion. ``I think Wall Street is looking for Looking for In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with. Disney to show strength in its core businesses,'' Cesinger said. ``Disney's already made a very sizable commitment to the Internet, and they don't really need to own Infoseek outright. I'm not sure it's a good strategy.'' Shares of Burbank-based Disney have been depressed over the past year mostly by worries about the high programming costs and lagging ratings at ABC ABC in full American Broadcasting Co. Major U.S. television network. It began when the expanding national radio network NBC split into the separate Red and Blue networks in 1928. and softness in consumer products. Meanwhile, ``pure-play'' Internet stocks Internet stock The equity security of a company engaged primarily in a business associated with the Internet. Also called dot-com. have soared, but concerns persist that Internet assets might be overvalued Overvalued A stock whose current price is not justified by the earnings outlook or price/earnings (P/E) ratio and thus, expected to drop in price. Overvaluation may result from an emotional buying spurt, which inflates the market price of the stock or from a deterioration in a , Cesinger said. Additionally, Disney shares could have been depressed Tuesday by longtime bull Stewart Halpern of ING Barings Furman Selz cutting his earnings estimates by 4 cents for the fiscal year ending Sept. 30, to 66 cents a share due to a bearish Bearish Words used to describe investor attitude. A bearish investor believes that a particular asset or the market as a whole will decline in value. bearish outlook for its consumer-products sector. He also sliced 6 cents from his fiscal 2000 estimate to 77 cents for the same reason. ``We now see weakness in Disney's highly profitable merchandising/licensing business as more fundamental and severe than the `Star Wars' crowding-out perspective,'' Halpern said. ``We expect this weaker-than-expected trend in merchandising/licensing to continue.'' Halpern repeated his ``buy'' rating with a 12-month target in the low $40s, indicating the price will rise as investors begin to give full credit for the ``hidden'' value of Disney's Internet assets. Disney's major new licensing property this year is the characters from the film ``Tarzan,'' due out June 18. Early reviews have been positive, but the toys face a difficult task in catching young customers' attention amid positive reception for ``Star Wars'' toys. By contrast, shares of Infoseek Corp. rose 13 percent Tuesday, gaining $5.625 to $48.625 and driving up its market capitalization Market Capitalization A measure of a public company's size. Market capitalization is the total dollar value of all outstanding shares. It's calculated by multiplying the number of shares times the current market price. This term is often referred to as market cap. to $1.73 billion from $1.53 billion. Disney presumably pre·sum·a·ble adj. That can be presumed or taken for granted; reasonable as a supposition: presumable causes of the disaster. would have to pay a premium for Infoseek to drop a provision in last year's deal that prevented Disney from boosting its 43 percent share until 2001. Infoseek shares are still down 42 percent since it jointly launched the Go Network portal site Noun 1. portal site - a site that the owner positions as an entrance to other sites on the internet; "a portal typically has search engines and free email and chat rooms etc. in January with Disney. |
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