Normally, an activist investor with an agenda and some sweeping plans for the company isn’t all that welcome. But it was a different matter today for media giant Disney (NYSE:DIS), as Blackwells Capital offered up a slate of candidates for the board and, with them, some significant plans for change. Disney investors seem to approve of a sweeping change, as shares were up modestly in Tuesday afternoon’s trading.
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Blackwells offered up three board candidates, noting that with them would come growth and technical expertise along with a plan to reconsider Disney’s real estate holdings. In fact, Blackwells noted that its candidates would “…explore all strategic possibilities with cold eyes,” to the point where it would even recommend breaking Disney into three separate companies. The shareholders will vote on April 3, and along with Blackwells’ three candidates, voters have two candidates available from a different activist investor: Trian Fund Management.
Disney’s Baffling Response
Naturally, Disney doesn’t much care for the notion of activist investors swooping in and changing things, so Disney responded in what may be the strangest way possible: it made a cartoon. Yes, it brought in none other than professional animated know-it-all Professor Ludwig Von Drake to explain how to vote in the upcoming board election. That’s likely to get as many voters in play as possible, but then Disney comes out and specifically instructs voters to “…not vote for the Trian Group or Blackwells nominees.”
It might have been helpful had it explained why those votes shouldn’t be cast, but Disney simply tells voters to not vote for those two groups over the course of the roughly two-and-a-half-minute cartoon.
Is Disney a Buy Right Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on DIS stock based on 15 Buys and five Holds assigned in the past three months, as indicated by the graphic below. After a 12.09% loss in its share price over the past year, the average DIS price target of $108.35 per share implies 10.66% upside potential.
