Jumping into the political fight cost Disney almost $50 billion since the beginning of March when the company decided to oppose a new education law in Florida.
In the last few days, Disney’s stock has plummeted by more than 8.5 percent as Florida lawmakers move to punish the largest employer in the state.
Disney Faced a Massive Loss Over its Criticism of the Florida Bill
Since March 1, the stocks of the company have declined by $46.5 billion in total.
Disney was hesitant to take a political position at the start. Yet, some of its investors and employees started becoming vocal about Florida’s education bill, which put the company in a strange situation.
Thus, the same woke investors are now facing the brunt of the declining value of Disney’s shares.
The GOP-led Florida Senate already passed a bill with a 23-16 vote against Disney, which would strip the company of its self-governing powers.
Similarly, the Florida House of Representatives also decided in favor of the measure with a 70-38 vote.
Disney LOSES nearly $50 billion in stock value since waging war against Florida's anti-grooming law https://t.co/5BPq9xDMWV
— Benny Johnson (@bennyjohnson) April 23, 2022
While talking about the new bill, the office of DeSantis claimed Disney was enjoying a favorable playing field by controlling the Reedy Creek district.
So, according to the office, Disney was acting as a regulator and a business at the same time.
Similarly, Disney was involved in indulging in the policies of the state, a privilege not given to any other corporation as per DeSantis’ office.
Disney is Likely to Retaliate Against Florida
However, Disney is likely to retaliate against the move, which is hurting its business model. According to some economists, the burden on taxpayers will be increased, and some significant business investments in the state can be rolled back.
As per the CNBC, the Reedy Creek district had bond liabilities of up to $1.7 billion, which means these liabilities will be transferred to the nearby counties, including Osceola and Orange.
Similarly, the debt service of the district is more than a billion dollars. Local government entities have to pick up these liabilities after the abolition of Reedy Creek, Democratic state Senator Gary Farmer suggested.
Liberals: Corporations don't pay their fair share".
Also Liberals: "Leave Disney alone, they don't need to pay taxes".
— Jasper Wrath (@ctroscoe1) April 21, 2022
Republican lawmakers are aware of the pitfalls that may come with the passage of the bill. They claim any legal or financial hurdle that may emerge after restricting Disney’s powers will be resolved in the upcoming months.
A finance professor at Florida Gulf Coast University, Thomas Smythe, asserted this step of the Republican governor is likely to discourage many other companies from making investments in the state.
He further added if Democrats clinch power in the future elections in the state of Florida, they will move ahead to reduce the political clout of conservative groups from companies, as they will retaliate against this measure.
Before the termination of Disney’s special powers, the company used to fix roads, regulate fire departments, and do other administrative work from its own pockets, which helped local residents evade taxes.
However, these people are now likely to come under the tax cap with the passage of the bill.