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Shareholder’s Bold AI Plan Promises 129% Surge for Disney Stock

Published 02/27/2024, 04:54 AM

A top Walt Disney Company (NYSE:DIS) shareholder is aggressively pushing a bold vision to unlock significant gains – advocating the entertainment giant embrace artificial intelligence and overhaul its business structure. Blackwells Capital claims an AI strategy could boost Disney’s stock price by 129%.

It’s urging Disney split into three companies, spin off parks and hotels, and wants board seats to drive this shake-up vision. Blackwells is wary of similar moves by Nelson Peltz’s Trian Group, which also seeks board representation. With its stock volatile and earnings on the horizon, Disney faces pressure to respond decisively to shareholders aiming to transform the iconic company radically.

Disney Activist Shareholder Says AI Can Boost Stock Returns by 129%

A prominent Disney shareholder is putting pressure on the entertainment giant to pursue transformative change, including developing an artificial intelligence strategy that could unlock significant stock gains. Blackwells Capital LLC urges Disney leadership to explore an AI strategy that its analysis shows could boost shares by up to 129% despite broadly supporting CEO Bob Iger’s oversight. Blackwells also advocates substantial restructuring, even calling for breaking up Disney and spinning off its lucrative parks and hotels business into a separate real estate investment trust.

The investor’s campaign for board seats has opened a proxy fight aimed at dividing Disney into three companies: focused on entertainment, theme parks, and consumer products. Blackwells has concerns over similar efforts by Trian Group, which is also angling for board representation to influence strategy. Blackwells specifically criticized Trian chief Nelson Peltz for soliciting support from Elon Musk in its Disney push.

The brewing boardroom battle has Disney on the defensive, taking steps to tout its value-creation track record and guide shareholders. After Trian proposed adding two directors, Disney launched to streamline voting logistics. Similarly, the Train group launched Trian boasts a sizable Disney stake, and its actions indicate meaningful clashes with current management, which lie ahead as it tries to shape the company’s direction.

Disney Shares Have Fluctuated Widely Over the Past 52 Weeks

Disney’s stock has fluctuated widely over the past 52 weeks, ranging from a low of $78.73 to a peak of $112.92 per share. That volatility reflects an eventful year that saw Disney leadership changes and shifting sentiment around its growth prospects in streaming and beyond. With its next earnings report expected between May 8 and May 13, Disney carries a forward dividend yield of around 0.84%.

Even after some recent swings, Disney ranks among the largest and most closely watched media companies. Its market capitalization topping $197 billion underscores Disney’s scale even if the current PE ratio signals investors remain cautious around profit trajectories going forward, with management striving to showcase expanding margins.


Disclaimer: Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

This article was originally published on The Tokenist. Check out The Tokenist’s free newsletter, Five Minute Finance, for weekly analysis of the biggest trends in finance and technology.

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