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Disney's busy week, under Trian's watchful eyes

Nov 1, 2023
Illustration of two hands grabbing for a Mickey Mouse ears hat surrounded by abstract shapes.

Illustration: Gabriella Turrisi/Axios

Disney delivers earnings next week, and the question looming large over the results is how one of its largest shareholders will respond, if at all.

Why it matters: A lot is riding on the company's fourth quarter report on Nov. 8, coming as Trian launches its second campaign for changes at the company, which is struggling under a sagging stock price and heavy pressure on multiple parts of its $150 billion business.

Zoom in: One of the oldest tricks in the activist hedge fund playbook is to front-run a target's earnings announcement with a white paper or some kind of swipe at the management team, board, overall strategy or a combination of all three. Turn attention away from a press release and back onto the campaign.

  • The response tactic from the company side is to make sure the release is packed with as many positives as possible.
  • Another possibility: The two sides agree to a peace deal that is announced as part of the earnings rollout.
  • It seems early for that, seeing as Disney's window for a shareholder to nominate directors doesn't open up until Dec. 5. Trian's co-founder Nelson Peltz plans to nominate himself and at least another director, according to sources.

Details: This time around, Trian has officially linked arms with Disney dissident Ike Perlmutter, a former executive who has entrusted his entire stake to the hedge fund and granted it voting authority, according to a source familiar with the matter.

  • That combined Disney stake is comprised of 33 million shares worth around $2.5 billion, the source says.
  • That would make Trian a top-five holder of Disney stock, owning nearly 2% of outstanding shares.
  • Trian's next 13-F filing is due to come out on or around Nov. 15, a disclosure that could offer additional details of its position.

The intrigue: There is very little detail, disclosed anywhere, of Perlmutter's total holdings in Disney.

  • "I acquired Disney stock in 2009 when Marvel was sold to Disney. I have not sold any of the Disney stock I received and, in fact, have added to my holdings over the years," Perlmutter said in a statement.

What's next: In addition to earnings, all eyes are on Hulu. Disney is on the hook to buy out Comcast's 33% stake in the streaming service. Both sides hold an option to trigger the sale, which is expected to happen Wednesday as part of a 2019 deal made at the height of the streaming era.

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