Disney stock price rises more than 20% in 2024 due to activist investor campaign targeting Bob Iger and board of directors

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Disney stock fell to multi-year lows in late 2023, but has rebounded more than 20% so far in 2024 as two activist investment firms launched a proxy fight.

The company’s stock closed Thursday at a fraction of $110.18. It started the year at $90.10 and has increased 22% year-to-date.

A decline in the stock price is the stated goal of two activist investment firms targeting Disney’s management and board ahead of Disney’s annual shareholder meeting on April 3. It’s not yet clear whether either opponent has been able to secure a meaningful return.Although there is some support from other shareholders, the large number of individuals who hold Disney stock means that it is less likely than stocks controlled by institutional investors. It is difficult to gauge underlying sentiment. Whatever the outcome, the costly friction with billionaire Nelson Peltz (allied with former Marvel CEO Ike Perlmutter) led to former CEO Michael Eisner being stripped of his chairmanship in 2004. The stage was set for perhaps the most consequential shareholder meeting since 2017. title.

Mr. Peltz’s Trian Fund Management is asking shareholders to support the election of Mr. Peltz and former Disney CFO Jay Laslo to the company’s board of directors, over the objections of Disney. Trian reiterated its complaints about what it sees as the company’s covert practices in a 130-page white paper and virtual town hall event for investors this week. Another activist, Blackwells Capital, has also voiced criticism of Tryon’s efforts, but has endorsed three of its own board candidates.

A third company, ValueAct Capital, is partnering with CEO Bob Iger and the company’s official board nominees. The company issued its own white paper on Thursday, reiterating its support. “We believe Disney can move the media industry forward as legacy technology transitions to digital platforms,” ValueAct co-CEO Mason Morfitt said in a written statement. There is. “I couldn’t be more excited to partner with Bob and the board.”

Mr. Iger has won over some Street skeptics by making dramatic moves to overhaul the company’s movie operations, ESPN and streaming, while leading cost-cutting efforts and increasing investment in parks. It has also received praise among the public. MoffettNathanson analyst Michael Nathanson praised Iger’s comments at a Morgan Stanley conference this week. The comments reinforced “the encouraging direction the company appears to be moving in,” Nathanson wrote in a note to clients on Wednesday.

Iger didn’t mince words at the press conference, saying the company had “already canceled some projects that we didn’t feel were strong enough” as the company restructured its movie studio operations. Meanwhile, the all-important parks sector is on track to record better-than-expected profits despite tough comparisons with the previous fiscal year.

The investor event followed the company’s quarterly earnings report last month. In addition to strong financial results, Iger announced a number of initiatives, including the acquisition of a Taylor Swift concert documentary for Disney+.green light for Moana 2 This year’s holiday animation frame.and investment in fortnite The manufacturer is Epic Games.

Asked about the proxy fight on earnings day and in a CNBC interview with Morgan Stanley, Mr. Iger called it a “distraction” and said he had no contact with Mr. Peltz or other rebels. He said it was the intention of the activists to induce management to “take their eyes off everything.” [that’s] We need to do what is necessary to benefit shareholders. ”