Welcome to Shareholder Fight Club

LIVE commentary from two ESPN rejects on the fights that matter to you and your money

Forget the first rule… talk about us

The main events. The fights of the century(ish). Our weekly coverage of matches that move markets. In the ring today:

Mouse Fight Highlights

Grudge Match: The long-time (since mid 2022) proxy rivalry between current Disney CEO Bob Iger, Trian Fund Management Co-founder Nelson Peltz, and hedge fund Blackwells Capital came to a head at Disney’s April 3rd AGM. Fighters were vying for Board control, and based on preliminary votes, it looks like Disney is keeping the belt. Here’s what’s on our minds.

Crowd-Sourced Combat: 35% of Disney’s stock is owned by retail investors, and an unnamed investor offered $100,000 for 500,000 of their votes through a platform called Shareholder Vote Exchange in March 2023. Buying shareholder votes is a clunky move, but it’s not an illegal on and might even be gaining traction. Will refs be taking a closer look at this move-set next season?

Standing on Legacy: From Instagram ads of field campaigner Winnie-the-Pooh to letters from the Walt’s grandchildren, Disney has positioned itself as a defender of the Disney legacy (read Peltz will kill your childhood dreams). But how will Disney Magic keep the park lights on given the 37% drop in $DIS since 2022? Disney now needs to focus on the future– without stock performance improvements, Disney is far from hanging up their (proxy) fighting gloves.

Settling the Dust: Now, Disney needs a new CEO, and among top internal contenders are Dana Walden and Alan Bergman (Disney Entertainment co-chairs), Jimmy Pitaro (ESPN chief), and Josh D’Amaro (Parks and Resorts chairperson). In the next few months, we’ll be looking towards Iger to make a decision.

Weekly Warfare:

• Starbucks is settling a proxy scuffle with the Strategic Organizing Center (SOC, labor union group) at the collective bargaining table.

  • The Prelude: In early 2023, the SOC began efforts toward unionizing Starbucks baristas. Their goal was a seat at the table to negotiate for better healthcare plans, improved working conditions, and increased job security.

  • Packing Camp: The SOC is now withdrawing its three board nominations. This announcement comes after proxy advisors Institutional Shareholder Services (ISS) and Glass Lewis both recommended that shareholders vote with management.

  • New Maneuver: This was the first time that a labor union had used a proxy fight strategy– they claimed $250 million in company losses from bargaining strategies.

  • Towards a Truce: Starbucks has agreed to engage in collective bargaining discussions, though a specific agreement has yet to be reached.

• Macy’s (retail giant) is in negotiations for a sale with Arkhouse (activist investor) despite preparations for a proxy fight over board nominees.

  • New Developments: The Macy’s / Arkhouse rivalry might be taking a turn. It looks like Macy’s is willing to consider a direct sale with Arkhouse at a $24-per-share offering and $9 billion valuation, and Arkhouse is willing to increase the offer if needed.

  • Preference for Peace: Arkhouse has indicated that they prefer a peaceful resolution, and we get it. Those shareholder campaigns aren’t cheap.

Updates In the Space:

• Robo-Advisors, beware

  • On March 27th, the SEC adopted an amendment to the Investment Advisers Act regarding "internet investment advisors” to better protect investors in the digital age.

  • Investment advisors operating exclusively digitally now must have an interactive service site that is operational at all times and provide services to all clients exclusively through that site.

  • These amendments only apply to advisors who rely on the Internet Advisers Exemption rule, which allows fully digital advisors who don’t meet typical requirements to register with the SEC.

  • Read the full statement here.

• SPAC disclosure rules finalized

  • In January, the SEC released some finalized rules aimed at improving investor protection in special purpose acquisition companies (SPACs) and their mergers with private companies.

  • Among new requirements are more disclosure about conflicts of interest, compensation, and potential risk.

  • Regarding transparency in mergers, the rules also establish minimum waiting periods for distributing information to shareholders (i.e. investors are promised some time to think before they vote on the merger).

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