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California’s Disneyland re-opening could bring momentum for DIS stock

Disneyland Resort in southern California.

Disneyland and other theme parks suffered massive financial losses due to coronavirus-related restrictions. Still, with vaccines’ availability against COVID-19, California said that the state would allow theme parks to re-open on April 1, albeit with new guidelines.

Dr. Mark Ghaly, secretary of California Health and Human Services, said in a conference on Friday that theme parks may open once their respective counties enter the red tier designation. 

California has color-coded tiers. Purple is the most stringent, while the red tier is the second most restrictive. CNN reported that the Long Angeles and Orange counties, where Disneyland and the Universal Studios theme parks are based, are still in the purple tier as of Friday. Still, they are anticipated to advance to the red tier in a week or two.


Only California residents will be allowed to enter the theme parks, though. They are also urged to follow the statewide travel advisory asking residents to remain within 120 miles from their homes. 

Theme parks will also accommodate only 15 percent of their capacity, and there will be time limits on indoor rides. Indoor dining remains prohibited. 

“With case rates and hospitalizations significantly lower, the arrival of three highly effective vaccines and targeted efforts aimed at vaccinating the most vulnerable communities, California can begin gradually and safely bringing back more activities, especially those that occur outdoors and where consistent masking is possible,” Ghaly said in a statement.

COVID’s impact on Disney 

California’s announcement comes as amusement parks worldwide suffer significant losses because of the pandemic. Last month, the Walt Disney Company reported that its revenue for the first fiscal quarter was $16.2 billion, or down 22% from last year. 

“The most significant impact on operating income in the current quarter from COVID-19 was an estimated detriment of approximately $2.6 billion at the Disney Parks, Experiences and Products segment due to revenue lost as a result of the closures and reduced operating capacities,” the company said in its earnings report

The Walt Disney stock remained resilient amid the health crisis

However, despite a negative revenue for the first fiscal quarter, the Walt Disney stock (NYSE: DIS) remained resilient throughout the pandemic with solid gains of 72% in the last twelve months.

NYSE: DIS. data. See more stocks here.

The opening of its theme park in Southern California could bring even more momentum for the stock. It is worth mentioning that its digital products like Disney+ highly supported Disney’s stock performance.

Disneyland Resort president Ken Potrock said that the re-opening of theme parks in California would help thousands of people get back to work and help businesses and the entire community. 

“With responsible Disney safety protocols already implemented around the world, we can’t wait to welcome our guests back and look forward to sharing an opening date soon,” he said.

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