Disney shares climb on dividends despite activist investor pressure
Since the return of Bob Iger, as CEO, of Walt Disney a year ago, it hasn't been a smooth ride.
Iger started by reducing costs significantly, culminating in a statement that Disney said it was on track to achieve about $7.5 billion in cost savings. He then put in place a plan to invest $60Bln over the next decade at Disney's streaming business, ESPN, and its theme parks. A strategy criticised by by activist investor Nelson Peltz, and his firm Trian, which holds about $3bln in Disney shares. Yesterday, Trian’s request for multiple seats on the Disney board was rejected. Trian now says it "intends to take its case for change directly to shareholders," signalling it will proceed to a second proxy fight and nominate director candidates when the window for nominations opens early next month. After the markets were closed, Blackwells Capital, another large investor in Disney, expressed its support for Iger, asking Peltz and Trian to "withdraw this costly and disruptive effort to displace experienced voices" in Disney's boardroom. Separately the Disney board reinstated its dividend and will pay 30 cents per share on January 10.
(AI Video Transcript)
Bob Iger
Bob Iger, the CEO of Walt Disney, has faced some difficulties since his return to the company. He has been working on cutting costs and has a plan to invest $60 billion in Disney's streaming business ESPN and theme park over the next ten years. However, an activist investor named Nelson Peltz and his company Tryon, who own around $3 billion worth of Disney shares, have criticized this strategy. They wanted multiple seats on Disney's board, but their request was denied. Now, Tryon is taking their case directly to the shareholders and planning a second proxy fight to nominate their own director candidates.
Walt Disney stock
Despite these challenges, Disney's stock has actually seen an increase after the markets closed. Another major investor called Blackwell's Capital has expressed their support for Bob Iger and urged Peltz and Tryon to withdraw their efforts to remove experienced voices from Disney's boardroom. It will be interesting to see how the stock reacts when the market opens.
While there are some positive aspects for the stock, such as the reinstatement of the dividend and a upcoming payment of 30 cents per share on January 10th, Bob Iger still has to navigate the obstacles presented by activist investors in order to ensure the success of his business strategy.
Overall, Bob Iger's return to Walt Disney has been a bit bumpy, with challenges from activist investors. However, there are supporters of his leadership and the stock seems to be doing well. It will be important to see how these developments unfold and how they impact Disney's future.
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