Activist Investor Dan Loeb Urges Disney to Cancel Its Dividend and Make More Disney+ Content Instead
Activist investor Dan Loeb of the hedge fund Third Point wrote a letter to Walt Disney (NYSE: DIS) CEO Bob Chapek on Wednesday, asking him to permanently suspend Disney's dividend and redirect those funds to make original content for the Disney+ streaming service.
"We share the view that Disney is embarking on one of the most important transitions in its history: shifting distribution of the world's most iconic entertainment brands from the box office to the home," Loeb wrote. "Disney+ has made admirable early progress."
In order to make the most of this once-in-a-generation opportunity, he said, Disney should stop paying dividends and invest the resulting savings of $3 billion a year into streaming content. Some of the new content would naturally spill over into the Disney-owned Hulu service, but Disney+ should see the lion's share on additional funding.
Source Fool.com
