The Rise of Activist Investors at Walt Disney

Walt Disney (ticker: DIS) is attracting the attention of activist investors, with San Francisco-based ValueAct Capital being the latest to take a stake in the company. Believing that Disney’s shares are undervalued, ValueAct’s stake size remains unknown. At the same time, Nelson Peltz’s Trian Fund Management is preparing to seek several seats on Disney’s board, adding to the growing number of activists involved.

The presence of these two major activists could increase the pressure on Disney as it strives to regain investor support. Peltz, who also holds voting shares previously owned by former Marvel executive Isaac “Ike” Perlmutter, will likely add further influence.

To recover investor confidence, Disney recently announced $2 billion in cost cuts and plans to reinstate its dividend. The company’s shares have seen an 8% increase this year, currently trading around $94 each. However, they are still down over 50% from their peak in March 2021.

ValueAct Capital argues that Disney’s theme parks and consumer products businesses alone justify a share price of $80. However, the hedge fund has yet to disclose its plans for the media and entertainment giant. Known as a “friendly activist,” ValueAct, founded by Jeff Ubben who departed in 2020, has a track record of easily securing at least one board seat in targeted companies. It is important to note that ValueAct is not collaborating with Trian, according to a source familiar with the matter.

CNBC was the first to report on ValueAct’s stake, but both ValueAct and Disney declined to provide immediate comments. It is expected that Trian’s strategies will remain unaffected by the presence of ValueAct.

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