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Two Ways: Disney-Dreamworks Deal Ain't Mickey Mouse


Strengthen your portfolio in good times and bad.


Walt Disney (DIS) announced today that it has entered into a distribution deal with Steven Speilberg's DreamWorks (DWA). Under the terms of the agreement, Disney will distribute 6 live-action films per year beginning in 2010. It's a partnership that could provide Dreamworks with up to $150 million in financing, as well as access to Disney's Starz Entertainment premium cable channel.

The announcement comes just 3 days after General Electric's (GE) Universal Pictures pulled out of a similar deal with Dreamworks. According to the Wall Street Journal, Dreamworks was seeking a commitment of at least $200 million - and asking that part of that money be paid upfront. Universal was planning to commit about $100 million, but abruptly pulled out of negotiations Friday morning.

For more, see Professor Glenn Curtis' Ticker Shock: Yum Looks Tasty; Disney Not So Magical.

From the Bull Pen: Disney might be a long-term option, but the chart doesn't look too rewarding in the near term. Instead, aggressive bulls can look to Yahoo (YHOO). A sell stop can be set below $13.

From the Bear Cave: It just doesn't feel right to be short at the moment. Nonetheless, bears can look to Time Warner (TWX). One can attempt a downside play near $10 resistance.

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No positions in stocks mentioned.

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