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Credit: Inside the MagicBillionaire activist investor Nelson Peltz is done playing nice with Disney and its claims of a bold new future for the company.
Nelson Peltz and his investment company, Trian Partners, are currently attempting to sway shareholders into putting him (along with former Disney CFO Jay Rasulo) in charge of the iconic media company, but have to get Disney CEO Bob Iger out of the way first. This all comes to a head in April in a proxy battle that will likely determine what kind of company Disney becomes in the next several years.
However, Peltz and Trian’s campaign against Bob Iger and, by extension, the current power structure of Disney hit a big snag recently. Iger’s unexpectedly good financial news (for shareholders, anyway) and massive new plans to invest in Fortnite, cut back on Marvel Studios projects, and spend a whopping $60 billion expanding Disney Parks gave him a much-needed boost in shareholder confidence, putting the CEO in a confident position for the first time in months.
Related: Bob Iger’s Urgent Plea Raises Stakes for Disney’s Future
Now, Nelson Peltz has angrily rejected the premise of Bob Iger’s earnings call, calling it a “fairy tale” and a distraction from the truth of Disney’s finances. Not only that, but Peltz himself went on CNBC to guarantee that he will be taking over the Walt Disney Company in April and giving a bizarre speech about never planning for failure.
In the wake of Marvel Studios’ much-anticipated Fantastic Four casting (which can easily be seen as an attempt to show Disney shareholders that the MCU still has plenty of fuel in the tank), Trian Partners has released a letter dismissing Bob Iger’s plans in no uncertain terms. It reads in part:
It turns out, Disney’s story was just a fairy tale. Disney’s stock price is lower now than a year ago; its streaming business lost another $1.7 billion; 2024 earnings per share estimates are down nearly 20%; two of Disney’s last five movies have failed to turn a profit; and the Board has still not identified a successor for Mr. Iger.
The letter goes on to essentially assert that Bob Iger and the Disney status quo have no idea what they are doing, and all of its announced plans are just a “fanciful tale” designed to fool shareholders into thinking that the company has “turned the corner and entered a new era.” The letter continues:
This time, Disney’s spaghetti-against-the-wall “plan” includes a $1.5 billion-dollar strategic investment that, according to Disney’s own Chief Financial Officer, lacks a product roadmap or expected return targets,11 and a sports streaming venture that likely confused consumers, surprised important content partners12 and competes with the Company’s own services.
But frenetic activity, in the face of a proxy contest, is not a substitute for a well-considered corporate strategy. Nor is throwing spaghetti at the wall going to feed shareholders who have been starved of returns for so long.
Disney shareholders need the company to consistently perform under the watchful eye of a vigilant Board. That is the recipe for good eating.
The spaghetti metaphor gets a little muddled by the end of that, but one thing is clear: Nelson Peltz is not backing down from this proxy battle just because of an earnings call.
Related: Former Marvel CEO, Billionaire Partner To Take Over Disney
In his interview with CNBC, Nelson Peltz gave a surprisingly emotional rebuttal to a question about what would happen if he lost the proxy vote, saying, “Oh, come on. We’re not going to lose, OK? Let’s get that straight. The people who own this stock, they want action. They don’t want promises, OK? That’s not what they want. We’re gonna win. We never plan and state what we’re going to do if we lose because we don’t lose.”
At the very least, it cannot be said that Nelson Peltz is not passionate about taking over Disney. He just refuses to plan for the chance that he might not be able to.
Do you think that Mr. Peltz will succeed in ousting Bob Iger? Would that be good for the company? Tell us in the comments below!