Uh Oh, Activist Investor Nelson Peltz Is After Disney’s Board Again
Key takeaways
- Activist investor Nelson Peltz is back for a seat at Disney after ending his proxy battle back in February
- The House of Mouse has slowed down on progress with its restructuring and plans to consolidate
- Disney shares were up 2.1% at the Peltz announcement
As activist investor Nelson Peltz is back in the ring for round two, Disney is on the ropes again. The hedge fund manager has steadily increased his company’s shares in the House of Mouse and is apparently asking for multiple board seats after Disney’s share price has sunk throughout the year.
Despite a massive restructuring plan and plans afoot to make more money, it’s clear Disney and CEO Bob Iger aren’t moving at a clip Peltz is happy with. Let’s get into what exactly Peltz is up to with his bid to get a seat on the board and what Disney has done to try and keep him at bay.
What’s happening with Disney?
We’ve been here before, just 10 months ago, in fact: activist investor Nelson Peltz was ready to take on the Disney board via a proxy fight unless his demands were met. Disney laid out a plan to address his concerns, including restarting dividend payments and $5.5 billion in budget cuts. Reassured, Peltz decided to end his proxy fight.
But things have changed since then — and not for the better, in Peltz’s eyes. Disney’s share price has fallen 30% since the last board battle. According to the Wall Street Journal, Peltz and Disney CEO Bob Iger have been in regular communication, but as the share price continued to decline over the summer, Disney stock has now sunk to a nine-year low.
This has prompted Peltz to ask for several board seats at Disney, including one for himself. Peltz’s hedge fund, Trian Fund Management, has already boosted its stake in the House of Mouse to 30 million shares. That puts the company as one of Disney’s largest shareholders.
At the news, Disney stock rose 2.1% and has made gains into Tuesday trading. Disney’s share price is now hovering around $85.
How could Disney turn things around?
Iger, whose contract as CEO has recently been extended into 2026, has a few irons in the fire to help Disney regain profitability. In July, the company announced it sought a strategic partner for its ESPN channel and explored new pacts with the NFL and NBA. The end goal is to make ESPN fully direct-to-consumer streaming, but no further announcements have been made.
As for the planned Disney+ and Hulu combination, it’s also been slow progress on that front. Disney is apparently interested in buying out Comcast from the remaining third of Hulu that it owns, but apparently, new features designed to encourage customers to buy a combined package have been delayed until March.
Iger has also set the goal of making Disney’s streaming division profitable by September 2024. The latest quarterly earnings report showed narrowing losses for the segment, and Disney has continued to introduce price hikes for its packages. After Netflix’s success, a crackdown on password sharing is said to be in the works.
The bottom line
Disney has had a seriously tough year — and it’s clear the shareholders aren’t happy to sit back and watch the company lose more of its share price value. But given the investor reaction, if Peltz gets his way, we could see Disney turn around its fortunes.
