Nelson Peltz’s Trian Asset Management has sold its stake in The Walt Disney Co. (NYSE:DIS) stock.
Peltz lost his effort to get himself and former Disney executive Jay Rasulo elected to the board following a proxy battle in April.
Peltz reportedly sold his stake at $120 per share, making a $1 billion profit. Disney was due to open this morning at $100.90 per share, with a market capitalization of about $184 billion. The proxy battle cost Peltz about $25 million, and Disney spent $40 million.
What Now, Mouse?
Peltz first began criticizing Disney CEO Bob Iger in early 2023. He backed off after the company announced billions of dollars in “cost reductions.” He became active again in December, pushing for the two board seats.
Peltz’s proxy battle sent Disney stock from $90 per share to $123 at the battle’s height. His sale removes a threat to Iger’s plans but also removes a spur to change. It could send the stock price back to that level.
The cost reductions began in April when 7,000 jobs were cut, including about 15% of positions in Disney’s entertainment division. The cuts continued into the summer, with some employees being told of their layoffs in Zoom calls.
Job cuts are continuing. Iger admits Disney is “dramatically” cutting spending in traditional TV. He has also cut 14% of the staff at the Pixar animation studio, dropping TV shows in favor of feature films.
The layoffs led to a March quarter loss of 1 cent per share. But excluding one-time costs Disney reported a profit of $1.21 per share, up 30% from a year earlier. Revenue was $22.1 billion, up just 1%. Disney is rated a strong buy at Tipranks with a price target of $129.
DIS Stock: What Happens Next?
Iger will continue trying to make more money with fewer assets, bundling Disney+ and Hulu with Warner Brothers Discovery’s (NYSE:WBD) Max. Disney, Warner and Fox (NASDAQ:FOX) also plan to bundle sports in a venture called Venu.
Maybe streaming will work if it’s just like the cable package you left.
On the date of publication, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
