A New Most Valuable Media Company
Yesterday during intraday trading Netflix topped Disney as the world’s most valuable media company, with a market cap of $152B. This is an amazing accomplishment for a company which started just 21 years ago as a mail order CD service. As you can see in the stock graph below Netflix has been slowly, steadily gaining on the Mouse, which it finally surpassed yesterday.
Interestingly, Netflix’s annual revenue is still only 30% of Disney’s, yet the companies’ valuations are about equal. It’s a sign that investors believe in Netflix’s long-term growth prospects and business strategy more. Using an example from a different industry, it’s the same reason Tesla has a higher market cap than GM.
Beyond just the Wall Street math this is a symbolic passing of the guard from traditional to digital media. Interesting times, to be sure.