Breaking Down Disney’s Board Fight and Its ‘Magical’ Rally

Disney and Bob Iger Win Big

Disney (DIS) has been having a great start to the year. Just look at its share price. We dive into what’s been going on with the entertainment giant.

The proxy battle for the company’s board is over. This week, the company and its CEO, Bob Iger, defeated an effort by activist investor Nelson Peltz to gain seats on its board of directors.

In a statement, Iger said that with the fight over, Disney is “eager to focus 100% of our attention on our most important priorities: growth and value creation for our shareholders and creative excellence for our consumers.”

Around 75% of retail investors backed the company’s slate, which is significant because they represent about a third of the House of Mouse’s total shareholders. They’re hoping Disney shares will continue to rise after a long, expensive battle for control.

Disney Drama 101

Here’s some background: In January, Disney nominated 12 people, including Iger, to its board of directors. A few days later, Peltz’ Trian Fund Management urged shareholders to vote against two of them. That would have freed space for Tian’s own candidates: Peltz and former Disney CFO Jay Rasulo.

Disney lobbied shareholders to reject the Trian nominees, while Peltz pushed a campaign called “Restore the Magic,” which called for Disney to implement a succession plan for Iger, create a new strategy for its ESPN properties, and find a partner for its TV channels.

But Disney argued that its current strategy is sound. Since February, it has announced a $1.5 billion investment in Fortnite-maker Epic Games and a partnership with rivals Warner Bros. Discovery Inc. (WBD) and Fox Corp. (FOX) to launch a sports streaming service.

Happiest Place on Earth

Disney stock is up more than 30% this year, exceeding the performance of streaming giant and competitor Netflix (NFLX). Cost cutting measures to boost profits, and supportive quarterly results helped this.

Meanwhile, Warner Bros. Discovery and Paramount (PARA) have seen their shares sink. The streaming wars for market share in people’s homes and profit may still be in full force, but if you look at stock performance, there’s a different picture.

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