Disney Stock (NYSE:DIS): Activist Involvement Could “Restore the Magic”

Walt Disney (NYSE:DIS) stock has been a colossal disappointment for investors over the past five years, going virtually nowhere in the timespan. It’s been such a brutal slog for Disney stock that activist investor Nelson Peltz has gotten involved in an attempt to unlock the magic.

With a proxy battle between Peltz and the firm, Disney makes for a very interesting turnaround play for investors willing to give the beaten-down media gem another look. I, for one, am bullish and think Peltz could be what the doctor ordered despite backlash from the firm.

With Bob Iger taking the place of Bob Chapek as CEO, the company may already have the tools it needs to climb out of its rut. Still, Iger doesn’t exactly have a stellar track record, given Disney stock’s woes started well before Chapek took the reins during the most uncertain part of the pandemic.

Activist Nelson Peltz Takes Aim

Activist involvement is no guarantee of an imminent turnaround. In some circumstances, such involvement may slow progress down. Disney went as far as to say Nelson Peltz “lacks skills and experience” to help the company as it continues to tread water. Undoubtedly, investors will get to have their say. Still, in the meantime, recent action in the stock suggests a board shuffle could be the best way to combat what Peltz views as a “crisis.”

Indeed, a crisis may be a stretch for some, but for the Disney shareholders who bought at or around the peak, Disney has been an investment nightmare as shares fell by more than 55% from peak to trough. The company has had enough time to move on from the worst of the pandemic, and its messy succession planning has also been difficult to ignore, with Iger coming out of retirement to stop the sinking ship of a stock.

In any case, I view Peltz as a man throwing shareholders a life raft by looking to secure a board seat for his firm, Trian Capital Management, rather than someone who could complicate matters further.

Disney already has a lot going on behind the scenes, and with hefty losses piled up from the Disney+ platform, a fresh pair of eyes may be what the House of Mouse needs to be dominant again in the modern era.

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