On many fronts, The Walt Disney Company finds itself in unprecedented territory. Despite the stock being up today, returning CEO Robert Iger is facing a storm like I have never seen before.
After throwing away a CEO that lasted all of eleven months, followed by replacing the Chair of the Board of the company and dropping a director position to try to stave off outside influences, Robert Iger is staring at a massively important earnings report. February 8th is dead-set in the middle of the upcoming week — it’s also when Iger will try to bring a calming presence to a company in chaos. But a push by Nelson Petlz and his Trian Group is no longer the only shark in the water looking to crash on Iger’s party.
First from Bezinga on the Peltz attempt:
DIS shares are volatile Thursday morning after Trian Partners sent a letter to Disney shareholders, urging them to vote activist investor Nelson Peltz onto the board.What To Know: In early January, Trian Partners nominated Peltz for election as director at Disney’s annual meeting in opposition to the nominees recommended by the board.
“While senior leadership of The Walt Disney Company and its Board of Directors have engaged with Mr. Peltz numerous times over the last few months, the Board does not endorse the Trian Group nominee, and recommends that shareholders not support its nominee,” Disney said at the time.
— Adam Eckart, Bezinga
That’s already a very serious push from a very serious investment group (seriously, read very skeptically any media that tell you otherwise). But now on top of that, Disney will convene their earnings report right in the middle of a full-on siege by Florida Governor Ron DeSantis and his conservative cohorts of the Sunshine State. While Disney is delivering their earnings report with Iger back at the helm at the first time, DeSantis has set into motion a plan to revoke Disney World’s self-governance powers. Reedy Creek, which we have covered extensively here, is the one-of-a-kind special district hat has given Disney a competitive advantage for decades. It is part of the reason that Disney World is the crown jewel in all of Disney’s massive portfolio. Now it’s about to be dissolved.
Is this coordinated? You be the judge.
Gov. Ron DeSantis is expecting there to be a special legislative session next week on the future of Walt Disney World’s Reedy Creek Improvement District.
DeSantis’ Press Secretary released a statement Tuesday evening confirming the Governor “anticipates a special session next week on Reedy Creek and other items.”
With both Peltz and DeSantis coming after Disney at this very vulnerable stage, Disney has never seen anything quite like this. It is squarely in the center of the culture war, political wars, the economic war between China and the United States, not to mention the battle over DEI and ESG. And though this article gives zero financial advice, I must say that I don’t know which way Peltz’ attempts will impact the stock value of the company. Is the value up today because investors believe Peltz might be victorious? Or is it because they think he won’t be? Who knows?!
One thing is for sure: this is Robert Iger’s moment. Unless he calms this storm around him, Disney may find itself made into swiss cheese as different viewpoints all converge on Disney as the battle ground. Given that Iger forced former-CEO, Bob Chapek, into a political corner last year, this could just be a case of karma or divine comeuppance. Or maybe he can solve all of this. The future is not yet written.
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