What happened
Shares of Walt Disney (DIS 1.77%) were climbing today as the entertainment giant said it was opening a part of Disney World in Florida soon, and as the broader market jumped after Moderna reported a successful phase 1 vaccine trial.
Disney stock was up just over 7% at the close on Monday, while the S&P 500 was up 3.15% on the vaccine news.
The Magic Kingdom at Disney World. Image source: Disney.
So what
In a blog post Saturday, Disney said it would open Disney Springs, a shopping, dining, and entertainment complex at Walt Disney World, on Wednesday as part of a phased reopening of the theme park, with third-party businesses opening their doors. The following week, the company will reopen three stores and venues in Disney Springs owned and operated by the company itself. In accordance with safety protocols, there will be temperature checks upon entry, and guests will be required to wear face coverings.
The reopening of Disney Springs follows a similar step at Shanghai Disneyland last week, where the park reopened at reduced capacity and tickets sold out.
Disney shares also got a boost from news that Moderna's vaccine was found to be safe after being tested in 45 people, and was shown to generate antibodies that stopped the virus from spreading. A second phase involving 600 people is set to begin soon, and a third trial testing it on thousands of patients would start in July. Moderna's chief medical officer, Tal Zaks, said that if those trials go well, the vaccine could be ready by the end of the year or early 2021.
Now what
Progress in discovering a vaccine is obviously good news for Disney. Its businesses are focused on discretionary spending, including theme parks, live sports, and movie and television production. They have been hit hard by the coronavirus, the related shutdowns, and social distancing. A large number of its businesses remain shuttered, so the sooner a vaccine or treatment is discovered, the easier it will be for the company to bring those businesses back to full capacity.
Similarly, the reopening of Disney Springs is a step in the right direction. Though the company will have to operate its parks at lower capacity and with safety protocols for the foreseeable future, reopening will help stem the cash burn from shuttered theme parks, and build momentum to a wider reopening.
