Walt Disney shareholder Blackwells Capital is calling for it come up with an artificial intelligence (AI) strategy, saying that this could lift the US media and entertainment giant's stock price by as much as 129%.
Blackwells is one of two activist investors pushing for board seats at Disney. While it has largely backed Disney CEO Bob Iger's leadership, it has recently laid out potential changes, including a possible breakup and spinning off its park and hotel assets into a real estate investment trust.
"Disney must produce an artificial intelligence strategy, and share elements of that strategy with its shareholders," Blackwells said in a presentation seen by Reuters on Monday.
In a letter Monday to shareholders titled "Promises Made: Promises Kept," Disney said the board was committed to what it called an "ambitious plan" to restore value to shareholders. It argued that replacing Disney board members with the nominees of two activist investors would disrupt the company's progress.
Disney also took issue with Blackwells' proposal that it spin off its land and hotels into a real estate investment trust, and break up the rest of the company into separate entities. That strategy, it argued, demonstrated "a complete misunderstanding of Disney's strengths derived from the synergies across our businesses."
Since the beginning of 2023, the largest technology companies have added more than $5.2 trillion to their cumulative market values after announcing major AI initiatives, Blackwells said, adding that Disney could do more if it adopted and preached the "technology native stack and mindset."
Disney formed an AI Task Force last year to study artificial intelligence and how it could be applied across the entertainment conglomerate, Reuters first reported.
Blackwells, which is pushing to win three board seats at Disney, said its share price could potentially rise $246.96 from its current level of $107.74, the presentation forecast.
"Artificial intelligences' impact on Disney – is at minimum – comparable to its impact at large tech companies," Blackwells said. "Disney's potential in the AI and spatial computing spaces cannot be understated," it added.
Blackwells also suggested that Disney hire a corporate chief technology officer to focus on technology transformation.
Nelson Peltz's Trian Fund Management is also campaigning for board representation at Disney, asking investors to elect its two director candidates.
