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Trading Disney's M&A


Playing the Marvel merger from the long side.

Hello from New York where glitches, conference calls and "life" got very much in the way of today's edition of "Macke Unmuzzled." Just another example of The Man trying to hold me down, I suppose. I'll be on-air tomorrow.

In "stuff I actually did" news, I've been picking away at Disney (DIS) on the long side today resulting in my holding a dwarf-sized starter position. I think the Marvel (MVL) deal makes all kinds of sense for both companies. Marvel can't get to the next level without better distribution and Disney needs more characters in the stable. In terms of synergies (a term hard to use without chuckling), Marvel has an under-exploited opportunity in products targeted to younger kids. Take it from a parent who spends hours a month searching for Wolverine toys that don't involve disembowelment for his four-year old; Marvel could be selling much more products.

It'll be tricky to take advantage of these opportunities without alienating the fan-boy base of comic book aficionados, but if Bob Iger has proven one thing, it's that he's a managerial stud. He's kept Disney moving through a horrific recession. Now he's using a global downturn to build up his character stable. Shrewd.

I bought the shares under $26 and see support at $25. If a full position was "Snow White and the Seven Dwarfs," I bought the equivalent of one dwarf, leaving 6 more and the Princess before it's a full long. Patience is a virtue and, I suspect, will be critical for navigating the rest of '09.
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Position in DIS

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