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Disney shares pop on promise of California Disneyland reopening

California provided new guidance allowing amusement parks to reopen next month.
Image: Magic Happens Parade
Minnie Mouse during the Magic Happens Parade on Main Street U.S.A. at Disneyland in Anaheim, Calif., on Feb 27, 2020.Jeff Gritchen / Orange County Register/SCNG/ Getty Images file
/ Source: CNBC.com

Shares of Disney rose as much as 5 percent in late-day trading Monday after California provided new guidance allowing amusement parks to reopen in the state on April 1.

The rally is set to add more than $15 billion to Disney’s market capitalization, bringing it to around $360 billion.

Disneyland and other parks in California have been closed for about a year due to coronavirus-related restrictions, even as other states such as Florida have allowed parks to reopen with limited capacity. Disney has not yet provided a reopening date for its California parks, but Disney and other theme park owners, including Universal Studios owner NBCUniversal, the parent company of NBC News, have pleaded with California officials to allow for a limited reopening.

The new state guidance permits amusement parks to reopen beginning April 1 with 15 percent to 35 percent capacity depending on the prevalence of the virus in the community. Masks and other health precautions will be required.

The shutdown led Disney to lay off tens of thousands of workers and slashed an important source of revenue for the media company. Disney said its parks and experiences sector saw a 53 percent dip in revenue in the December quarter compared to last year, at $3.58 billion. Disney said coronavirus-related closures cost the division about $2.6 billion in lost operating income for the quarter.

Officials are becoming more optimistic about a return to normalcy as more people become vaccinated against Covid-19. The Centers for Disease Control and Prevention said Monday that people who have been fully vaccinated can safely meet indoors without masks. While its California parks have remained closed to visitors, Disneyland has been aiding the public health effort by recently began serving as a vaccination site for state residents.

In addition to the theme park news, Disney could also stand to gain in its movie business. More theaters in North America have been opening up, with 45 percent of theaters in the region open over the past weekend, compared to 42 percent the weekend prior, according to Comscore.