Nelson Peltz Lost-I Celebrate
Nelson Peltz is an 81-year-old man who runs Trian Capital, an activist fund. Nelson Peltz’s family looks very annoying. Nelson Peltz won his charge for board seats at Disney.
Two of those three things are true. Unfortunately, for him, Nelson did not win his vote and get board seats in Disney. Fortunately for Disney shareholders, Nelson Peltz did not win his vote and get board seats in Disney. Allow me to explain for thankfully the last time, why I, as a Disney shareholder, did not want Nelson Peltz to get board seats.
First, we need to understand where Nelson Peltz was coming from. Nelson Peltz fashions himself as a bit of a Wall Street legend, and he sort of is. Nelson Peltz has a lot of money under management ($7.5 billion), but crucially, he is managing less money than he used to. Trian Capital recently underwent a bit of a power struggle that saw Trian’s cofounder leave with a good amount of cash behind him. After losing money and a lot of talent, Trian needed to reclaim the spotlight, so they found one of the most famous entities in American history, saw it was about to rebound, and tried to jump on the train to the top. There was never any need for Trian, ever. And Trian was very close. Had Disney’s first quarter results been average, it is entirely possible that Nelson Peltz would have board seats right now, but those results weren’t average, they were spectacular. And investors, particularly the all-important institutional investors, saw what they always knew, Nelson Peltz would not add anything, he was just doing this for clout, which brings me to a good point-Nelson was not going to do anything.
Nelson Peltz came to Disney in late 2022 and said, “cut costs.” Bob Iger came back to Disney in 2022, and said, “Cut costs.” That was it. Nelson Peltz had nothing else to add. All Nelson could do was ask Iger to fire people, which he had already done. Besides, as I have said for oh so long, what in the world could Nelson Peltz add to a media company that Bob Iger could not? And I know there are some out there who believe Bob Iger really is not that great; they compare the S&P 500 and Disney stock over the past 10 years, see the underperformance, and blame Bob Iger. What “they” fail to understand is that this underperformance is precisely what makes Disney such a great opportunity. Bob Iger is a great leader, and Nelson Peltz would have only gotten in his way.
However, the one valid point ole’ Nelly did have, was that Bob Iger needs to find a successor, and stick by him. Bob Iger’s one fatal flaw is his failure to find a successor he trusts. There have been about half a dozen people who were, at one point, being groomed to be CEO of Disney. One of those people was Bob Chapek, who failed immediately because Bob Iger continually undermined him to the board of Disney, which Iger basically controls. Bob Iger does need to find a successor, get this successor out in the public eye for a while, and let everyone acclimate to the idea that Bob Iger will not be the CEO of Disney soon; something I am not sure Bob Iger has acclimated to.
To summarize, Nelson Peltz would have added no value to Disney, seeing as he has never been in media at all. Nelson Peltz would have only gotten in the way of one of entertainment’s greatest-ever leaders. Nelson Peltz was only there to take credit because his fund was starting to teeter a bit. Keep trusting in Disney, and if it falls a bit, buy some more.
