Investing Legend Casts Doubt On Disney’s Future

We have seen Wall Street and its take on the Walt Disney Company (Walt Disney Co.) fluctuate dramatically in recent months as the Walt Disney Company goes through tremendous shakeups (especially the ousting of former CEO Bob Chapek and the reinstatement of retired Disney CEO Bob Iger), with Iger’s plans for 7,000 layoffs leading to a significant rise in Disney stock prices and other pieces of controversial Disney news consistently making the Walt Disney stock values move back and forth faster than a Disney World roller coaster.

After Iger returned and Bob Chapek left, we did see some more consistent increases in Walt Disney stock value, and at least one major hedge fund billionaire saw fit to buy back the shares that they had sold off last autumn.

This hedge fund billionaire also bought far more Walt Disney stock than they had sold, suggesting a lot of confidence in CEO Bob Iger and the direction that he is planning on taking for the company — but apparently another notable billionaire has a completely different take on the situation!

Charlie Munger, a highly-respected investor, spoke with the Daily Journal recently alongside the Disney CEO himself, Bob Iger. During the conversation, Charlie Munger shared some big concerns that he had about Disney’s validity as a competitor in its industries.

Since Charlie Munger is known for working closely with Warren Buffett, who is considered to be one of the most successful investors of all time, his educated opinions tend to hold a lot of weight with Wall Street.

The Berkshire Hathaway vice chairman (who is reportedly worth at least $2.3 billion, and is just shy of being a centenarian) said in the conversation that “practically every business that Disney has, has gotten tougher than it used to be.”

“Welcome to human life,” Munger continued, turning philosophical for a moment before getting back to specific Disney examples. “Think about Disney — once owned the world. Lion King was running a long run in the Theater District of New York. They went from triumph to triumph, marching, marching, marching. All of a sudden, practically every front, it’s more difficult.”

“How would you like running the sports, ESPN, now at Disney compared to its heyday? It’s going to be way harder for them,” Munger explained.

The Walt Disney Company (and CEO Bob Iger) may have some big fish who are continuing to support them on Wall Street, but the publicly-revealed doubts of a Wall Street legend like Charlie Munger will certainly seem discouraging to many Disney stockholders!

Iger did mention some of Munger’s concerns indirectly during a quarterly earnings call earlier in February, but he also seemed optimistic that Disney could bounce back after cutting back drastically on expenditures and endeavoring to “reassess all markets” (presumably including Disney media, Disney entertainment, Disney theme parks, et cetera).

Do you think that the Walt Disney Company will recover from the hits that it has taken since the start of the ongoing COVID-19 pandemic, since facing the controversies that have waylaid Disney (particularly in Walt Disney World within Florida), and since trying to stay relevant in an increasingly-expanding world of entertainment?