Nelson Peltz, founding partner and CEO of Trian Fund Management, speaks with CNBC's Andrew Ross Sorkin on July 17, 2013 in New York.
Heidi Gutman | CNBC, NBCU photo bank, NBCUniversal via Getty Images
Aren't you having fun, Nelson Peltz?
Disney shares jumped about 10% on Thursday after the The company reported earnings Wednesday and flooded the area with new announcements designed not only to excite its employees and shareholders, but also to put activist investor Nelson Peltz in his place.
Peltz launched a proxy fight against Disney, asking investors to nominate him and former Disney Chief Financial Officer Jay Rasulo to replace current board members Michael Froman and Maria Elena Lagomasino. Disney's higher profits, along with the series of content and partnership announcements, appeared to be a direct rebuttal to Peltz's concerns about the company.
“The last thing we need right now is to be distracted by one or more activists who have a different agenda and don't understand our business,” Disney Chief Executive Bob Iger told Julia Boorstin of CNBC.
During his company's first quarter earnings conference call, he added: “We have turned a corner and entered a new era.”
Peltz, who took a stake in Disney last year only to abandon and then renew his proxy fight threats, responded by telling CNBC he wouldn't back down this time.
“It’s déjà vu all over again,” said Trian Fund Management, Peltz’s company. said in a statement. “We saw this movie last year and didn't like the ending.”
It's been difficult to follow Disney's announcements this quarter:
- ESPN has finally set a launch date for its direct-to-consumer service: August or fall 2025.
- Disney is buying a $1.5 billion stake in Epic Games, the maker of Fortnite. This is Disney's “biggest foray into gaming ever,” Iger told Boorstin.
- Taylor Swift's Eras Tour film is coming to Disney+.
- Disney increased its dividend by 50% compared to the last dividend paid in January.
- Disney has announced that a sequel to “Moana” will hit theaters in November, likely to be the studio's biggest box office hit of the year.
- Disney is on track to meet or exceed its $7.5 billion spending reduction goal by the end of fiscal 2024.
- The company said it expects Fiscal 2024 profits will increase by at least 20% compared to 2023.
All of these announcements came a day after Disney made other major news, revealing the launch of a joint venture with Warner Bros. Discovery and Fox to offer ESPN in a skinny new linear network package aimed at sports fans later this year. This will be the first time cord cutters and cord cutters will have access to ESPN outside of the traditional cable bundle.
It makes perfect sense that the mountain of announcements happened this quarter, given the activist pressure from Trian and Capital of Blackwells. Iger has every interest in fending off criticism of his performance and strategy.
Peltz criticized Iger's leadership as stocks fell over the past year, underperforming the S&P 500. Trian launched a website, Restorethemagic.comwho claims that Disney “did not play for the shareholders”.
“It saddens me that the board did not welcome me,” Peltz said last month. “This business is simply not run properly.”
Iger said he had not spoken with Peltz recently and had no plans to speak with him. In a filing last month, Disney said “In deciding not to recommend Mr. Peltz, the directors considered a number of factors, including the fact that during a two-year search for a seat on Disney's board of directors, Mr. Peltz had not actually presented any strategic ideas for Disney.”
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