Cramer’s take on Disney’s proxy fight with Nelson Peltz

Walt Disney Co (NYSE: DIS) has been in focus in recent days after naming Mark Parker its next executive chairman and opposing Nelson Peltz push for a board seat (read more).

Cramer wants Nelson Peltz on the board

Peltz’ Trian Fund Management has a stake worth more than $800 million in the entertainment conglomerate.

Making his case this week, the activist investor blasted Disney for spending $71 billion on Fox in 2019 – an acquisition that, he said, weighed on the balance sheet, ravaged shareholder value, and indicated lousy corporate governance.

Agreeing to his criticism last night on Mad Money, Jim Cramer said:

It’s the board, the stewards, who haven’t done a good job. Now the shareholders, and not Peltz. Now someone like Peltz, who’s been tremendously successful, wants to join them and they act like that’s a problem.

Proxy fight could hit shareholder returns

The Fox acquisition deprived shareholders of dividend payments as well. Cramer is also against Disney engaging in a proxy fight because for the investors, it could mean more pain ahead.

Lots of money, your money if you’re a shareholder, will be spent to stop Peltz from joining the board – even though he was not involved with disastrous Fox acquisition or the disastrous choice to make Bob Chapek the CEO.

Walt Disney Co is set to report its Q1 results next month. Consensus is for it to earn 75 cents a share this quarter versus a much higher $1.06 per share a year ago.

Disney shares are currently down about 50% versus their record high in March 2021.

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