The Stock Market Doesn't Like Disney's New CEO
Shares in the Walt Disney Corporation took a 1.5% dip earlier today when Josh D'Amaro was announced as the new CEO of the company, pending Bob Iger's resignation later this year.
According to The Wrap, Disney's shares have fallen 9.8% in the past month, 13.8% in the past sixth months, and 43% in the past five years, currently trading at $102 per share.
The company has been undergoing a public succession contest over the past few years to determine who would succeed long-time CEO Bob Iger when his contract runs out this year, which has clearly caused many shareholders to lose faith in the company.
Why Are Disney's Shares Going Down?
Prior to D'Amaro's appointment as the new CEO of Disney, the company's share prices had already been falling pretty rapidly. As with many large companies, this downfall was triggered by the COVID-19 pandemic in 2020, which saw Disney take a massive hit to productivity when theaters closed down globally.
This was also the time that Bob Iger initially stepped back as CEO, allowing Bob Chapek to take his place. Chapek was a much less popular leader, overseeing some of Disney's lowest figures for several years and ultimately finding himself ousted by the company's senior leadership. Iger was brought back as CEO in a move that displayed Disney's unstable structure and sent share prices falling again.
Now, Josh D'Amaro's appointment has been met with another downfall in shares. Despite Bob Iger's assurances that D'Amaro is the right man for the job (which he rarely said about Chapek), the decision is an undeniably risky one. D'Amaro was the Chairman of Disney Experiences, the division of the company that deals with parks, cruises, and vacation packages—but not movies, television, or media.
Guggenheim Securities analyst Michael Morris admits that while D'Amaro's appointment is a risky move, it represents a "potential inflation point for Disney's strategic direction." The expert claims that "his leadership could result in more disciplined content investment decisions, better coordination between content creation and distribution, and enhanced focus on high-return consumer touchpoints."