Disney’s Bob Iger Strategizes Boosting Stocks as Activist Investor Seeks Board Seat
By Movieguide® Contributor
Disney’s stocks don’t look good, and as CEO Bog Iger strategizes what to do next, one of Disney’s investor activists grows impatient.
“Disney’s stock has hit multiyear lows, and activist investor Nelson Peltz is pushing for multiple board seats at the company. The company’s parks business is slowing, its linear TV division is declining, and its streaming business is not yet profitable,” Yahoo Finance reported.
CNBC reported, “Peltz’s Trian Fund Management has oversight of about $2.5 billion of Disney shares and will be paying close attention to Disney’s fiscal fourth-quarter earnings report after the bell Wednesday, according to people familiar with the matter. The majority of the shares controlled by Trian belong to Ike Perlmutter, the former boss of Marvel Entertainment and a Peltz ally who has clashed with Disney Chief Executive Bob Iger in the past.”
Per CNBC, Peltz tried to get on the board in February, but Iger snubbed him. If Peltz succeeds in his next attempt, Trian Fund will likely gun for Iger’s removal, who already renewed his contract with Disney five times to date.
However, former Disney executive and advisor to Iger, Kevin Mayor, confirmed his confidence in the CEO.
“Bob has his hands full,” Mayer said on Tuesday. “Someone like Bob, he’s very capable, he’s multifaceted. He has a lot of range so he can handle it. Not everyone can handle a situation like that. But I think you have to be disciplined, and Bob’s always been very strategic.”
“When the stock price goes up and [Iger] articulates a great strategic vision — that will take care of most of the problems,” he continued.
Movieguide® recently reported on Disney’s decision to buy the final stake in Hulu shares, which leaves them with full ownership of the site. The company hopes that it will ultimately have a positive impact on stock shares:
Despite a year beset with financial struggles, Disney is confident it can shoulder the cost of acquiring Comcast’s stake, boasting $1.6 billion of cash flow and $11.5 billion of free cash on its balance sheet for the most recent fiscal quarter.
“We’re going to have plenty of future cash flow to help fund all of this going forward,” said interim CFO Kevin Lansberry. “We’re prioritizing free cash flow as a company. And we’re being really disciplined and smart about how we go about allocating capital across the company.”
Iger admits he does have some challenges. He recently stated that he believes Disney focused too much on quantity over quality in 2023.
“I’ve looked at our overall output, meaning the studio, [and it] is clear that the pandemic created a lot of challenges creatively for everybody,” he said. “At the time the pandemic hit we were leaning into a huge increase in how much we were making. I’ve always felt that quantity can be actually a negative when it comes to quality and I think that’s exactly what happened.”
“Working with the talented team at the studio, we’re working to consolidate, meaning make less [and] focus more on quality,” Iger said. “I feel good about the direction we’re headed, but I’m mindful of the fact that our performance from a quality perspective wasn’t really up to the standards that we set for ourselves.”
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