Bob Iger, who returned last week as CEO of Disney (DIS), told employees on Monday that he intends to maintain the company’s current hiring freeze. He reiterated the need for Disney to shift the objective of its streaming business away from subscriber growth at all costs and toward profitability. As shareholders of the club, we are pleased to see Iger taking steps to right the wrongs of his predecessor. Iger’s comments, at his first townhall meeting since taking over from the ousted Bob Chapek, fall in line with his previously published memo to Disney Media and Entertainment Distribution employees last week. In that correspondence, which came less than 24 hours after his rehearing, Iger announced the departure of the group’s leader, Kareem Daniels. He also wrote: “In the coming weeks, we will begin implementing organizational and operational changes within the company. I intend to reorganize things in a way that honors and respects creativity as its heart and soul.” .. As you know, this is a time of enormous change and challenges in our industry, and our work will also focus on creating a more efficient and cost-effective structure.” We’re pleased to see Iger emphasizing this view again on Monday. As club members will recall, we began calling for change at the top on November 8th, following Disney’s terrible financial fourth quarter results. Had to go About two weeks later, he was gone. While Chapek may be a great operator on the theme park side of the operation, Iger understands that at its core, Disney is about creativity and storytelling. Furthermore, Iger is clearly returning to the role with the understanding that while subscriber growth may be the key streaming metric in a zero-interest-rate world — in the current scenario, it’s all about profit. Previous management was too slow to respond to a rapidly evolving operating environment as inflation increased and the Federal Reserve raised rates as aggressively as we’ve ever seen in response. We look forward to learning more about how Iger plans to reorganize operations in the coming months — but for now, we believe the hiring freeze and stress as Disney’s primary engines for growth. This decision to keep the creativity and storytelling alive is off to a strong start. The faster Iger can show improvement in terms of streaming profitability — or at least reduce losses in the near term — the faster we’ll see a turn higher in Disney’s stock price. Shares were down about 3% in Monday’s down market. They’re off about 38% to date. We have 1 rating on Disney, which means we view the shares as a buy at current levels. While it may take some time, we think the company is back on the right track — and as a result, believe the risk/reward is incredibly favorable for those looking to show Iger progress in a few quarters. Willing to give because that paves a way. Streaming Profitability. (Jim Cramer’s charitable trust is long DIS. See here for a full list of stocks.) As a CNBC Investing Club subscriber with Jim Cramer, you’ll receive trade alerts before Jim trades. Jim waits 45 minutes to send a trade alert before buying or selling stocks in his charitable trust’s portfolio. If Jim talks about a stock on CNBC TV, he waits 72 hours after the trade alert is issued before executing the trade. The above Investment Club information is subject to our terms and conditions and privacy policy, along with our disclaimer. No fiduciary obligation or duty exists, or is created, by virtue of your receipt of any information provided in connection with Investment Club. No specific results or benefits are guaranteed.
Bob Iger, former CEO, The Walt Disney Company
Scott Mill | cnbc
Bob Iger, who returned as CEO last week disney (DIS) told employees on Monday that it wanted to maintain the company’s current recruitment freeze. He reiterated the need for Disney to shift the objective of its streaming business away from subscriber growth at all costs and toward profitability. As shareholders of the club, we are pleased to see Iger taking steps to right the wrongs of his predecessor.