Stock market value of Netflix eclipses Disney for first time

Daniel Fowler
May 27, 2018

Streaming giant Netflix is now worth more than Disney, making it not only the best way to waste an evening, but also the most valuable "pure media" company in the world. This makes Netflix officially the largest traditional media company in the world, having already risen above Warner Bros., Fox and Viacom.

The event marked a milestone for Netflix, which has experienced rapid growth since embracing a streaming content model that emphasized original content such as the hit series "Stranger Things" and "House of Cards".

Shares of the video streaming service rose as much as 2 percent to $351.48 in NY, and the company's market cap topped $152 billion, exceeding the value of Disney, which was down 1.6 percent, according to data compiled by Bloomberg.

Netflix finished the day with a market cap of $151.8 billion, while Disney ended with $152.18 billion.

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A day after Comcast said it was preparing to challenge Disney's pending deal to acquire most of 21st Century Fox, Disney's stock price has slipped again. Disney, with 2017 revenue of US$55.1 billion, owns ABC and ESPN, two of the most valuable TV networks in the USA, along with its namesake parks and resorts and prosperous movie studio. But the entertainment giant is also contending with difficulties at ESPN, which has lost millions of paid subscribers as more consumers turn to streaming options.

At the same time, Netflix is burning through tons of cash as it spends an ever-increasing amount on original content for its global audience - and it expects the business to be free-cash-flow negative for the next few years.

Netflix's stock has grown by more than 80 percent in value this year.

Netflix is the top performing stock on the S&P 500 this year, and has led the index in three of the past six years. Netflix recently traded at 98 times expected earnings for the next 12 months, versus Disney and Comcast at 14 times earnings, according to Thomson Reuters data. The company introduce a web-based ESPN subscription service and has plans for an additional offering.

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