Disney shares surged by 6% in after-market trading on Wednesday following the release of earnings and a slew of announcements aimed at exciting employees, shareholders, and countering activist investor Nelson Peltz.
Peltz initiated a proxy fight against Disney, urging investors to nominate him and former Disney CFO Jay Rasulo to replace current board members Michael Froman and Maria Elena Lagomasino. Disney’s strong profits and a series of content and partnership announcements were perceived as a direct response to Peltz’s concerns.
Disney CEO Bob Iger stated, “The last thing we need right now is to be distracted by an activist or activists that have a different agenda and don’t understand our company.” He emphasized that the company has entered a new era.
Peltz, undeterred, responded that he won’t back down, describing the situation as “deja vu all over again.” Trian Fund Management, Peltz’s firm, expressed dissatisfaction with the developments.
Disney’s announcements included ESPN’s launch date for its direct-to-consumer service, a $1.5 billion stake in Epic Games, a 50% dividend increase, a sequel to “Moana,” and expectations of exceeding $7.5 billion in targeted spending cuts by fiscal 2024.
These revelations coincided with Disney’s joint venture with Warner Bros. Discovery and Fox to offer ESPN in a new bundle catering to sports fans, addressing the growing trend of cord-cutting.
The timing of these announcements aligns with activist pressure from Trian and Blackwells Capital. Iger is keen on defending his performance against critics like Peltz, who has criticized Iger’s leadership as Disney’s shares underperformed in the past year.
Peltz, critical of the board, expressed disappointment that the company did not welcome him, stating, “This company is just not being run properly.” Iger, however, has not recently spoken with Peltz and has no plans to engage with him, as per a filing from last month, citing Peltz’s failure to present a single strategic idea for Disney during his two-year quest for a seat on the board.