Nelson Peltz Made $1 Billion on Disney

By Douglas A. McIntyre Published May 30, 7:10AM EDT

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Nelson Peltz Made $1 Billion on Disney — © Valerie Loiseleux / iStock Unreleased via Getty Images

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Nelson Peltz may have lost his proxy war with Walt Disney Co. (NYSE: DIS | DIS Price Prediction).
But he apparently walked away $1 billion richer.

Nelson Peltz, the leader of Trian and corporate raider, tried to get two seats on the Walt Disney Co. (NYSE: DIS) board of directors because he believed he could get the company to restructure in a direction that would be better for shareholders. He lost that proxy fight, and there were rumors about how much money he had made in the process. Some estimates were as low as $300 million. Others were closer to $1 billion.

Recently, a source told CNBC that the figure was indeed $1 billion. Peltz sold his shares shortly after he lost his battle. He cashed out at about $120 a share, and the stock trades at $100 now. In the process of losing, Peltz received a great consolation prize.

Is Disney Better Off?

Peltz was right about Disney?

Peltz may well have been right about Disney. It trades where it did at the start of the year. As the proxy battle peaked in April, it was up 37% for the year. Disney’s earnings after its annual meeting may have proved that Peltz was right. Results showed that Disney’s current structure cannot produce strong earnings, at least compared to its best years in the past decade.

Peltz said that Disney was a highly complex operation with some divisions that were expensive enough to run that they cut into operating income. One of these was its streaming business, which has lost billions of dollars since it was launched. Those losses lessened recently but are still losses. Disney’s flagship parks business showed signs of weakness. Disney has no major division that can be an engine for much better earnings.

Corporate raiders have lost proxy battles before. Some made money as they exited the wars that they lost to boards and management. Peltz joins the list of those who watched a stock rise as they pressed their cases, which allowed them to walk away richer.

If You Invested $15,000 in Disney 10 Years Ago, This Is How Much You Would Have Today

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.