Hedge fund billionaire Dan Loeb urges Disney to stop paying $3 billion dividend and use funds to grow Disney+
- Hedge fund billionaire Dan Loeb urged Disney to suspend its dividend payments and instead use those funds to grow Disney+ streaming.
- The founder of Third Point wrote a letter on Wednesday to CEO Bob Chapek saying that reallocating this dividend money could double the company's streaming services budget for original content, Bloomberg reported.
- Loeb's push to build out streaming comes as in-person movie theaters continue to suffer throughout the pandemic.
- "Every Hollywood executive has been able to enjoy first-run films in the comfort of their home theaters for years," he said. "We urge you to democratize this experience."
Investor Dan Loeb urged Disney CEO Bob Chapek to end the company's annual $3 billion dividend payments and redirect those funds to building up Disney+ in a Wednesday letter.
The founder of Third Point said that reallocating dividend money to Disney+ could double the streaming service's budget for original content, bring in additional subscribers, lower churn, and boost pricing power, according to the letter obtained by Bloomberg. His push for streaming comes as in-person movie theaters continue to suffer throughout the pandemic.
"Every Hollywood executive has been able to enjoy first-run films in the comfort of their home theaters for years," he said. "We urge you to democratize this experience."
In August, Loeb initiated a long position in Disney during the second quarter and said in a quarterly letter that streaming is Disney's "biggest market opportunity ever with potentially $500 billion of revenue."
Shares of Disney rose as much as 2% during Wednesday trading. The media giant is down nearly 15% year-to-date but has gained over 42% since the depths of the pandemic.
Loeb's Third Point owns less than 1% of Disney, according to Bloomberg.