[Asia Economy New York=Special Correspondent Joselgina] Bob Chapek, former CEO of Walt Disney, was abruptly replaced due to significant dissatisfaction from the Chief Financial Officer (CFO), other executives, and investors, according to reports.
The Wall Street Journal (WSJ) reported on the 22nd (local time), citing sources, that Disney's executives and investors had expressed concerns about the direction of the company under former CEO Chapek to Robert Iger (Bob Iger) several months ago, and these opinions were conveyed to the board of directors.
Accordingly, Disney's board decided on the night of Sunday the 20th to dismiss Chapek as CEO and announced the appointment of Bob Iger, who led Disney for 15 years, as the new CEO. Chapek, who succeeded Iger as CEO in February 2020, had his term extended by the board in June. However, he was dismissed just five months later.
Sources revealed that despite the extension of his term, Chapek had been in an unstable position within Disney for several months. Under Chapek's leadership, Disney faced pressure from two well-known activist investors to cut costs and change strategies, and other executives and investors, including CFO Christine McCarthy, also voiced dissatisfaction with his policies.
WSJ particularly pointed out that the decisive factor for this dismissal was the conference call following the third-quarter earnings announcement. During this call, Disney announced that its streaming services division posted a loss of $1.47 billion in the third quarter, more than double the loss from the previous year. Disney's third-quarter results also fell far short of Wall Street expectations. Additionally, Disney stated that theme park revenue, which had driven its earnings, was also declining, putting the streaming division's performance targets through September 2024 at risk amid an economic slowdown.
Despite this gloomy outlook, Chapek's tone during the conference call was optimistic, and his projections were positive. He emphasized at the time, "I believe we are on the path to a profitable streaming business that creates shareholder value."
However, investors did not trust him. As a result, Disney's stock plummeted by as much as 13% the following day. Analysts released numerous reports with negative outlooks on Disney. Jim Cramer, a well-known host on CNBC, even called for Chapek's dismissal.
Sources said that CFO McCarthy and other executives reported to the board that Chapek had issues with how he communicated with investors, prompting the board to take action. Board Chair Susan Arnold called Bob Iger, who led Disney for 15 years, to confirm his willingness to return.
The day before, Disney's stock closed up 6.30% compared to the previous session on news of Bob Iger's return. However, on that day, Disney's stock was trading down more than 2%.
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