The former CEO saw his three-year term at Disney (NYSE: DIS) plagued by the COVID-19 pandemic, which hurt Disney more than most companies. Not only did the company have to close its amusement parks for long periods, but movie theatre closures severely hampered its ability to generate revenue via movie releases.
The company released its transformational streaming service, Disney+, shortly before Chapek took over. While the service has been seen as an overall success, its development was started under his predecessor (and now successor) Bob Iger, leaving Chapek with none of the credit and most of the blame for the growing pains experienced by the platform.
While the COVID-19 pandemic is (hopefully) nearing its end, Disney has still been struggling financially. Since Chapek took over, the company’s stock is down 19%, while the S&P 500 is up 34% over that same time. Calls for Chapek’s ouster began to grow louder after he was perceived to not take the company’s struggles seriously on a recent earnings call.
This week, the situation finally came to a head when Disney’s board of directors informed Chapek that Iger would be rejoining the company and taking back the job he had previously held for 15 years.
Source: CNBC Television YouTube
Disney’s chairman of the board, Susan Arnold, commented:
Iger has agreed to serve as CEO for two years. During that time, he will set Disney back on the path of growing profitability while also identifying and developing his successor.
Just what Iger will do at Disney is unclear at this time, but investors cheered the decisions nonetheless; the stock gained +10% the day of the announcement. Disney is betting that Iger will lead the company into a fully reopened, post-pandemic world. A world which should look a lot like the one where Iger led Disney to become the preeminent entertainment company in the world.
Shares of Disney are currently trading at $98.54 per share, up +2.42% on the day. YTD, DIS stock is down -37.14%.
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Disclaimer: Wealthy VC does not hold a long or short position in any of the stocks mentioned in this article.