‘Closer’ Bob Iger, Can He Boost Both Disney’s Performance and Stock Price?

[Image source=Yonhap News]

[Asia Economy Reporter Minji Lee] Expectations are rising that profitability will improve more quickly as Bob Iger, who grew Walt Disney into the world's largest entertainment company, returns as CEO.

Looking at Disney's stock price on the 27th, it shows $98.87, up 6.53% over the past week. The announcement on the 21st that Bob Iger would return as Disney CEO acted as a positive factor for the stock price.

Park Dakyum, a researcher at Hi Investment & Securities, said, "Since he is regarded as the person who created the current Disney by acquiring major IPs and launching D2C platforms during his term, expectations for the former CEO have influenced this result," adding, "The future direction of the stock price will be determined by how Bob Iger overcomes difficulties through his actions."

Iger will serve as CEO for the next two years. He stated, "We will reorganize the organization and operating methods over the coming weeks," and added, "We aim to establish a new structure within the next few months by empowering Dana Walden, Alan Bergman, Jimmy Pitaro, and Christine McCarthy and rationalizing costs." The previous CEO, Chapek (who took office in February 2020), has been suspended from duties since Iger's appointment. Chapek faced profitability issues

Cost efficiency is the most necessary aspect for Disney. Previously, Disney recorded $20.2 billion in revenue and an EPS of $0.3 for the fourth quarter, significantly below market expectations. The market had anticipated $21.3 billion in revenue and an EPS of $0.56. By segment, the D2C and content divisions posted operating losses of $1.5 billion and $200 million respectively, continuing deficits compared to the previous quarter. The parks division recorded $1.5 billion, down 31% over the same period.

Researcher Park Dakyum explained, "This is due to the D2C division and the parks division, whose profit margins have declined compared to pre-COVID-19 levels," adding, "In particular, the parks division was burdened not only by seasonality and increased post-COVID-19 related costs but also by hurricane damage and the launch of new cruises."

In Disney's media division, the number of subscribers reached 225 million, a 32% increase year-over-year, continuing external growth. Among them, Disney+ subscribers reached 164 million, a 39% increase. Kim Sehwan, a researcher at KB Securities, said, "The growth in Disney+ subscribers is also positive for the stock price," and added, "Improved theme park revenue based on strong pricing power (with plans to raise theme park fees in December) is also expected."