Third Point Fund disclosed about $1 billion stake in Walt Disney – 16.08.2022

Hedge fund Third Point unveiled a roughly $1 billion stake in Walt Disney yesterday and said it plans to pressure the media company to make a number of changes, from dismantling cable sports channel ESPN to buying back shares and adding new board members. of the directors, Reuters reports, according to

Billionaire investor Daniel Loeb, who runs Third Point, made a splash at Disney when he built a new stake in the company in the second quarter, shortly after selling his stake in the company a few months ago, when price fears and interest rates were rising faster. into big sales.

Now Third Point, which owns about 0.4 percent of the company known for its theme parks and movies like “Aladdin” and “Frozen,” is back with praise for the company’s CEO, Robert Chuckle, and a list of initiatives he and the board of directors must follow to spur growth.

“We are so confident in the current trajectory of Disney that we have repurchased a significant stake in the company in recent weeks,” Loeb wrote in a letter to Chapek in a letter seen by Reuters.

Loeb wrote the letter after Disney said its quarterly profit rose 50% and that streaming subscriptions had overtaken Netflix.

Tackle has faced criticism from Hollywood over a 2021 dispute with Marvel’s Black Widow star Scarlett Johansson, and a political firestorm over the company’s response to a new Florida education law, where the company has about 80,000 employees.

Disney was initially silent about the measure limiting classroom discussions about gender identity and sexual orientation, which drew criticism from that community and some staff. He later condemned the law, leading Florida Governor Ron DeSantis to criticize the Disney Walk.

Loeb wrote that management may already be considering the changes he proposed, including cutting costs, paying down debt and repurchasing shares. He said the Disney board needs to be modernized, and to find “talent and experience gaps across the group that need to be addressed.”

Loeb said he has identified potential executives, but declined to go into details.

Disney said in a statement that it welcomes “the views of all of our investors.” He noted the company’s revenue and profit growth under the leadership of Entanglement, adding that its board of directors “has extensive experience in branded, consumer and technology businesses.”

Active investors often advance their agendas by trying to win seats on the board, either through an invitation from the company or by rallying other investors to support executives in a vote.

A key proposal from Loeb includes ESPN, which he believes should be presented to shareholders. Disney was asked to hire bankers and lawyers to “re-evaluate the appropriateness of the transaction in the current environment,” after Disney had already looked into the matter.

Industry trade publication Puck reported last year that Disney was considering disconnecting ESPN because the network was losing cable subscribers. The same publication wrote last month that this option is no longer being considered and that live sports is a “pillar” of the company’s business.

Loeb also suggested that Disney accelerate the timeline to buy the remaining Hulu shares from minority stakeholder Comcast before the planned acquisition in 2024.

This would pave the way for Hulu to be integrated into the Disney+ technology platform and save money.

Disney shares, which have fallen about 21% since January, rose 2.2% to $124.21 yesterday afternoon.

Loeb has previously advocated for the change at companies ranging from Nestlé to healthcare Baxter International.

Sources said Loeb, like other prominent hedge fund managers, suffered double losses this year and tried to limit the damage by selling nearly all of his technology stocks at the start of the year.

Third Point repurchased Disney stock at a lower level than when it first invested in 2020.

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