On Monday morning, Walt Disney (NYSE:DIS) reached its highest point since April when news broke that Third Point and investor Dan Loeb had purchased a new investment and used the occasion to recommend that ESPN be split out from the entire firm
The value of Disney (NYSE:DIS) stock has increased by 2.8% as of 12:30 p.m., placing it among the top five large-cap gainers in the Communication Services sector.
Bob Chapek, the CEO of Disney (NYSE:DIS), received a letter from Loeb in which he encouraged him to make efforts to buy Comcast (NASDAQ:CMCSA) out of its remaining minority stake in Hulu before the contractual deadline to do so in early 2024 – even at a “modest premium” to accelerate integration. Loeb’s letter was sent in response to Chapek’s request that Loeb sends him a letter.
Hulu was once owned jointly by Disney, Fox, Comcast, and Time Warner; however, Disney has since acquired Fox’s media holdings, and Time Warner has since sold its part back to Disney and Comcast. Comcast has acquired a one-third ownership stake in the streamer at this point.
Additionally, according to Loeb, there is a compelling argument for spinning out ESPN.
Update: Third Point and Loeb
Third Point has requested Hart-Scott-Rodino approval from the FTC to directly engage with Disney. Additionally, Third Point has suggested that the board be refreshed to address “gaps in talent and experience as a group that must be addressed,” and it has identified potential directors.
In addition, Loeb and Third Point have proposed a program for decreasing costs, which would include the sale of underperforming assets, the suspension of the cash dividend, and the use of free cash flow for the repayment of the debt, the acquisition of shares of stock, or organic investments.
An Overview of the Technology Industry during the Past Couple of Weeks
Even though the technology industry had a relatively quiet week compared to what it had previously been through amid a flood of sector earnings reports, some of the most prominent names in the industry still managed to make some noise and draw attention across Wall Street.
A few noteworthy earnings reports came in, one of which was from the Walt Disney Company and was one of the most highly followed (NYSE:DIS).
Last week, Disney (NYSE:DIS) announced the results of its second quarter, which featured a good performance from the company’s parks sector. This was because attendance counts continued to move closer and closer to the levels they had been at before the COVID-19 outbreak. Investors were so happy with Disney’s performance that they propelled the company’s shares to a high point not seen in the last four months.
Featured Image: Megapixl @Timonschneider
Author Shariq Khan 
