I think one thing to consider in terms of Iger and the lack of a rally in the stock: the market knows he’s good at buying things, and right now he can only cut spending and not engage his true skill. With the debt, upcoming purchase of Hulu from CMCSA, and a lack of a transformative-enough target, the man who moved Marvel from the public markets over to the Mouse’s ledger just isn’t the same catalyst he used to be.
How can Disney be half as valuable now [under Bob Iger](https://www.fool.com/investing/2022/11/22/disneys-boomerang-ceo-has-little-time-and-lots-to/) than it was a year into Bob Chapek's tenure?
This is pretty easy to answer. It takes time for a CEO’s effect to be felt. A year into Chapek’s term they were still riding on the moves made by Iger 1. It is now just barely over a year since Iger returned, and they are riding on Chapek’s results.
With a few exceptions it takes a good 2 to 3 years for a CEO’s moves to be felt. (The exceptions are sometimes when someone comes in with a power saw and chops expenses, often at the cost of results a further 2 or 3 years later. Not always of course, sometimes there’s just obvious fat.)
It’s also an unusual time in history; while the (domestic) parks are full, I don’t know about those in Asia or elsewhere. Cruise lines? Movie theater box office? There are lots of issues still being resolved in the world and Disney is not immune to them.
The fact that Disney is #2 in streaming seems to augur well, even if the startup has encountered substantial losses. Ifj Disney is going to continue to be a force in the popular culture they have to have a distribution platform. Previously they could rely on cable companies or over-the-air to reach the greater public, but in the new paradigm it’s better to have your own than rely on others.
(I know that shop-at-home channels are facing an existential crisis, for example, as cable cutters chop the reach those channels used to enjoy.)
I’d say give it time. Iger has a pretty enviable record, I think he deserves a bit of space.
I agree with all of that, and I guess that could be a set of reasons why at least there is a question in terms of whether the stock deserves to be trading at a range above current levels…in other words, maybe it should be bouncing between $110/$120 before this all gets sorted out.
I think one other complication is the fact that Iger is still only saying D+ will be profitable by the previously announced date…I was hoping for that to be pushed up to maybe end of '23 or beginning of '24 (if I recall the original time-frame correctly). I am, however, assuming that if he really is doing a good job bringing in expenses, then we will see an earlier breakeven, then profit.
Mark, I hadn’t read about that, he did? I thought he was happy with DIS now and decided not to engage a proxy battle. I assumed that meant he kept the shares? I could be wrong in that assumption, of course.
There’s no way to know for sure. Since he owned less than 5%, he doesn’t have to file anything about his trades. But usually activists, once they accomplish their goal (or give up on their goal), get out and use the capital for their next project. Usually when the stock pops ~20% after/due to their actions, they take the money and run.