Elon Musk Takes Side in Major Disney Dispute, Shares Rise 33%

Key Takeaways

  • Elon Musk commits to buying Disney shares if Trian Fund Management's board proposal wins.
  • Trian Fund Management's bid for Disney board seats challenges CEO Bob Iger's leadership, despite Disney's share price rise and strategic successes.
  • The outcome of Disney's proxy battle with Trian could significantly impact its future direction and shareholder value as it continues to innovate and grow.

As Disney is actively disputing with its major shareholders, Trian Fund Management, Elon Musk promises to buy company shares if the investors win.

Elon Musk, who is behind Tesla, SpaceX, and Twitter (former X), believes that Trian CEO Nelson Peltz should be a board member at Disney. He took it to X to promise to buy Disney shares if Peltz made it to the board.

What happened with Disney?

Disney’s shares have seen a 33% increase this year under CEO Bob Iger’s return.

Despite this, Trian Fund Management, holding 1.8% of Disney’s shares, is pushing for change. It seeks two board seats to influence the company’s direction. This move challenges Iger’s plans for revitalizing the company, but Disney appears to have secured over half the votes needed to defeat Trian’s proposal ahead of an April 3 meeting.

The dispute has put the spotlight on Disney’s strategic decisions and financial performance, especially after reporting better-than-expected earnings for the first quarter of 2024.

Despite Trian’s criticisms of Disney’s management and performance, significant investors like BlackRock and T. Rowe Price have shown support for Disney’s current leadership. The outcome of the board seat battle could impact Disney’s future direction, particularly in how it navigates challenges in its Parks business and the declining linear television sector.

What’s Next for Disney Stock?

Disney’s recent strategic moves, including a partnership with Epic Games and plans for new streaming services, have been part of Iger’s efforts to drive growth.

However, Trian’s campaign and the upcoming proxy vote have raised questions about the best path forward for Disney and its shareholders. With a diverse base of individual and institutional investors, the final decision on board composition will significantly influence Disney’s ability to maintain its positive momentum and address ongoing industry challenges.

So far, Disney stock gained 8% in March and 33% since the beginning of the year.

Disney shares in March
Disney shares in March | Source: Google Finance