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Nelson Peltz Made $1 Billion on Disney

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24/7 Insights

  • Nelson Peltz may have lost his proxy war with Walt Disney Co. (NYSE: DIS).
  • But he apparently walked away $1 billion richer.

Nelson Peltz, the leader of Trian and corporate raider, tried to get two seats on the Walt Disney Co. (NYSE: DIS) board of directors because he believed he could get the company to restructure in a direction that would be better for shareholders. He lost that proxy fight, and there were rumors about how much money he had made in the process. Some estimates were as low as $300 million. Others were closer to $1 billion.

Recently, a source told CNBC that the figure was indeed $1 billion. Peltz sold his shares shortly after he lost his battle. He cashed out at about $120 a share, and the stock trades at $100 now. In the process of losing, Peltz received a great consolation prize.

Is Disney Better Off?

Source: tvierimaa / iStock Editorial via Getty Images
Peltz was right about Disney?

Peltz may well have been right about Disney. It trades where it did at the start of the year. As the proxy battle peaked in April, it was up 37% for the year. Disney’s earnings after its annual meeting may have proved that Peltz was right. Results showed that Disney’s current structure cannot produce strong earnings, at least compared to its best years in the past decade.

Peltz said that Disney was a highly complex operation with some divisions that were expensive enough to run that they cut into operating income. One of these was its streaming business, which has lost billions of dollars since it was launched. Those losses lessened recently but are still losses. Disney’s flagship parks business showed signs of weakness. Disney has no major division that can be an engine for much better earnings.

Corporate raiders have lost proxy battles before. Some made money as they exited the wars that they lost to boards and management. Peltz joins the list of those who watched a stock rise as they pressed their cases, which allowed them to walk away richer.

If You Invested $15,000 in Disney 10 Years Ago, This Is How Much You Would Have Today

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