Daniel Loeb re-invests in Disney: what strategic changes is he proposing?


Walt Disney Co (NYSE: DIS) popped nearly 3.0% on Monday after Daniel Loeb built a sizable position (again) in the entertainment conglomerate.

Loeb wants Disney to spin-off ESPN

The activist investor used his New York based hedge fund (Third Point Management) to take a stake in Disney.

He wants the Burbank-headquartered firm to spin-off ESPN much like eBay did PayPal. In a letter to Disney, Loeb wrote:

ESPN would have greater flexibility to pursue business initiatives that may be difficult as part of Disney, such as sports betting. Most arrangements between the two can be replicated contractually, in the way eBay spun PayPal while continuing to utilise it to process payments.

Disney will raise the price of ESPN+ subscription by $3.0 on August 23rd. Wall Street recommends that you buy Disney stock down more than 20% for the year.

Loeb wants Disney to take control of Hulu

Disney has an agreement with Comcast to buy a 33% stake the latter has in Hulu over the next two years. But Loeb wants it to accelerate that acquisition to take control of what it already manages and integrate the streaming service into Disney+.

We believe that it would even be prudent for Disney to pay a modest premium to accelerate the integration. We know this is a priority for you and hope there is a deal to be had before Comcast is contractually obligated to do so in about 18 months.

He was also a Disney investor from 2020 to early 2022. The news comes a week after the NYSE-listed firm reported market-beating results for its fiscal third quarter. Disney now has more subscribers across its streaming services than Netflix.  

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