Elon Musk, the world’s third richest man, promised Disney shareholders he would dip into his vast wealth to buy up stock in the troubled entertainment giant if they voted hedge fund manager Nelson Peltz onto the board today.
The activist investor is losing a bitterly-fought proxy war with Bob Iger, whose decision to halt ad spending on X threatened to bankrupt Musk’s social media company.
The Tesla boss retaliated by calling for Disney to sack its CEO and is funding a wrongful dismissal lawsuit against Disney filed by actress Gina Carano.
Musk, who recently posed smiling for the cameras standing next to Peltz, openly endorsed the hedge fund manager on Wednesday, predicting good things for the stock price.
“While I don’t own any Disney shares today, I would definitely buy their shares if Nelson were elected to the board,” he posted to X. “He would help reform the company, improve the quality of product and generally serve in the best interests of shareholders.”
The endorsement may come too late, however. The shareholder meeting is scheduled for today, and more than half the votes have reportedly already been cast.
While I don’t own any Disney shares today, I would definitely buy their shares if Nelson were elected to the board.
His track record is excellent.
— Elon Musk (@elonmusk) April 3, 2024
While the largest U.S. public pension fund, CalPERS, and asset manager Neuberger Berman both backed Peltz, a story in the Wall Street Journal this week predicted Disney had pulled ahead of Peltz, while Reuters reported sources on Tuesday as saying the founding partner of Trian Partners already lost.
The leaks angered fellow activist investor and hedge fund billionaire Bill Ackman, who called for the U.S. Securities and Exchange Commission to punish Disney for its carefully timed blow that sunk Iger’s rival.
“The SEC should do a thorough investigation of this proxy contest and appropriately punish whoever is responsible for this miscarriage of shareholder governance and justice,” Ackman wrote on Tuesday, arguing only Disney officers were privy to the vote tally.
Disney did not respond to a request for comment from Fortune.
Billionaire Bill Ackman wants Disney punished for leaks
Peltz hopes to shake up a board believed to be too cozy with its CEO.
He believes the entertainment giant’s vaunted value-creating “flywheel” is at risk—and judging from the recent rally in Disney shares, it seemed as if investors by and large agreed.
Many of the films Disney produced last year flopped at the box office, driving less traffic to its lucrative theme parks, whose role in turn is to rejuvenate consumer interest in its underlying content like its Marvel Cinematic Universe franchise and start the process afresh.
Yet Pixar no longer reliably churns out hits, legendary properties like Star Wars have withered on the vine and even the once indestructible MCU suffered its lowest box office ever in The Marvels when adjusted for inflation.
Meanwhile, Disney’s animation studio offers up one uninspired live-action retread of a beloved classic after another.
The company’s creative bankruptcy has offered ample fodder for critics and was even lampooned by South Park, which singled out Iger and Lucasfilm studio boss Kathleen Kennedy as the culprits behind the mismanagement.
There have been a few recent articles in the press about @Disney ‘winning’ its proxy contest with Nelson Peltz based on early election returns that have been leaked to the media. We don’t have an investment in Disney, but I thought it useful to point out the inappropriateness of…
— Bill Ackman (@BillAckman) April 2, 2024
Venerable proxy advisory firm Institutional Shareholder Services subsequently recommended investors back Peltz in his crusade to shake up the company, but the well-timed Disney leaks may have turned the tables on the would-be board director.
Ackman—himself a veteran of proxy battles—argued most professional money managers are too afraid of losing access to the C-suite and will only vote against a board’s recommendations if convinced they will succeed.
“An institution may think: if Peltz is going to lose, it is not worth taking the risk of offending management by voting for him,” he wrote, adding he too was the victim of a similar tactic when facing off against payroll company ADP.
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