The recent developments between Disney (NYSE:DIS) and the State of Florida are heating up, making the stock one to avoid for the foreseeable future. A self-governing district protects the many attractions and entertainment options at Disney World. Florida believes that this district is unhelpful, with the potentially unfair argument that the legislature should have to pay off all of its bond debt before making any changes.
Disney said in a public investor statement that removing the special tax district would breach Florida’s pledge to bondholders. Last Thursday, the report addressed to the municipal security regulator was a signal that Disney is considering their retaliation against Florida lawmakers who oppose them.
In April, Florida Governor Ron DeSantis called on Capitol legislators to vote on stripping Disney of its autonomous privileges. Disney has a special tax district for its employees, exempting them from some regulations. However, they still have to pay property taxes. Disney is a big tax contributor in Central Florida. They generate over $300 million in property taxes and roughly $250 million from various state taxes each year. The district’s outstanding debt means that the state cannot interfere with its tax-raising powers.
These developments are interesting for Disney investors who are undecided about whether or not they should invest in more shares of DIS stock. At this time, the company’s legal matters are complicated.
DIS Stock: Is it a Buy Right Now?
There are many reasons why Walt Disney is a great investment. But one of the main ones is that the company has an excellent track record, evidenced by its decades-long history and its many popular movies, TV shows, and more.
At the moment, investors might be on the fence for two reasons. The first has to do with the recent legal hurdles. The other has to do with current streaming trends.
Netflix (NASDAQ:NFLX) saw a significant loss of subscribers in the first quarter. That sent shockwaves throughout the streaming space. Disney will spend $33 billion on its content in 2022, including on its streaming platforms like Disney+ and Hulu. The strategy is to pay dividends. Disney+ recorded 11.8 million new subscribers in the past quarter, reaching a total of 129.8 million so far. It expects to reach 230 million to 260 million by 2024. Therefore, investors should keep an eye on DIS stock. However, at the moment, it might be a bit too risky for the average investor.
On the publication date, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
