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Why Walt Disney Stock Jumped Today

By Anders Bylund – Apr 9, 2020 at 12:54PM

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The House of Mouse reached 50 million paid subscribers for Disney+ in less than five months. Investors are impressed.

What happened

Shares of Walt Disney (DIS 4.44%) jumped as much as 6.8% on Thursday, after the media giant announced that the Disney+ video-streaming service now has 50 million paying members. By 11:10 a.m. EDT, the stock had pulled back to a 4.3% gain.

So what

Disney+ garnered 10 million subscribers -- most of them free trials -- on its first day on the market. The tally reached 28.6 million paid accounts in early February. Many streaming services benefit from coronavirus lockdowns and stay-at-home orders, and the 50-million figure also includes 8 million subscribers that were already signed up for local market leader Hotstar when Disney baked Disney+ into that established platform last week. Other significant additions came from Disney+ launches across several Western European countries in March.

Still image from Finding Dory

Image source: Disney.

Now what

It's no surprise to see Disney's streaming service hit the ground running, backed by an unmatched catalog of classic titles plus popular additions like The Mandalorian and High School Musical: The Musical: The Series. Disney's brand name alone was enough to ensure millions of sign-ups from families with young children. The service is also playing a new role in the COVID-19 era as several brand-new films either became available on the service much sooner than expected or skipped the silver screen entirely in favor of a premiere on Disney+.

It remains to be seen how loyal the accounts gained in the coronavirus lockdown period will be in the fall and beyond, but Disney+ is certainly off to a fantastic start.

Anders Bylund owns shares of Walt Disney. The Motley Fool owns shares of and recommends Walt Disney and recommends the following options: long January 2021 $60 calls on Walt Disney and short April 2020 $135 calls on Walt Disney. The Motley Fool has a disclosure policy.

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