Wall Street recently welcomed Disney’s financial performance, based on the stock’s performance since the company provided details of its performance in the second quarter. However, there are some investors who still believe that the owner of ABC, Disney World, and Hulu has a lot to go.
In an August 15 letter to Disney CEO Bob Chuckle, activist investor Third Point LLC suggested that Disney consider ditching sports media company ESPN, buying Comcast’s stake in Hulu and reshaping its board.
“We expect to see the quality of Disney’s financial results improve as the company’s business shifts more” to the consumer-facing arena, said Daniel Loeb, CEO of Third Point, in the note to the Disney president, noting that “our confidence in Disney” The current path is that we have, in recent weeks, repurchased a significant stake in the company.”
Loeb suggested that Disney embark on a cost-cutting program that addresses both margins and disposes of excess underperforming assets rather than restoring its profits, which it has stopped paying to deal with conditions imposed by the global coronavirus pandemic. Loeb also recommended that Disney consider buying Comcast’s minority stake in Hulu before the 2024 contractual deadline when Disney must do so. He suggested that Disney take out ESPN while maintaining contractual ties with the sports outlet, so that ESPN is able to delve deeper into sports betting. Finally, Loeb called for a “board modernization,” and said he had some potential candidates in mind.
Disney did not immediately respond to an inquiry seeking comment.
More is coming….
[ad_2]
