Bob Chapek Ousted as Disney Brings Back Bob Iger as CEO in Surprise Move, DIS Stock Soars
In response to the news, Disney shares surged by as much as 10% on the day of the announcement.
After a rather rough tenure at Disney (NYSE: DIS), Bob Chapek resigned from the company following the board’s decision to bring back its former CEO, Bob Iger. The former CEO saw his three-year term at Disney 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 the 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.
Disney’s chairman of the board, Susan Arnold, commented:
“The Board has concluded that as Disney embarks on an increasingly complex period of industry transformation, Bob Iger is uniquely situated to lead the Company through this pivotal period.”
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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