Can Disney Do Better? – The New York Times

Dan Loeb Challenges Mickey’s Cares Again

Third Point, a hedge fund led by Dan Loeb, bought new shares in entertainment giant Disney worth about $1 billion, spun off ESPN, took full early control of streaming service Hulu, and installed new board members. Disney has so far put some of these ideas on hold, and Loeb could face resistance if he doesn’t have representation on the board. He points out that four years is short.)

Third Point had just wrapped up another campaign at Disney. In 2020, the company went public, worth more than $900 million in its heyday, and sought more investment in streaming. We then sold all of our remaining Disney shares in the first quarter of this year.

Disney’s streaming bet has paid off. Main streaming service Disney+ added 14.4 million subscribers in its most recent quarter, far exceeding Wall Street’s expectations.Disney’s strong performance in a business that is increasingly driving the entertainment industry has created a safer area for Loeb to launch campaigns, even as other streaming companies struggle, which has derailed. less risk of Like Bill Ackman’s investment in Netflix was. Nonetheless, Disney’s stock has fallen about 20% since the beginning of the year, trailing the S&P 500.

ESPN is in Loeb’s field of view. Analysts and bankers have long speculated that Disney may spin off its sports network and related businesses, and those businesses are growing much faster than many of its portfolio.

But Disney has reasons to keep it. ESPN is the company’s revenue engine, helping offset losses in funding streaming. In February, Disney CEO Bob Chapek spoke about the future of the brand, expressed excitement about its possible entry into sports betting, and tried to assuage expectations that he might be leaving ESPN. The sports network also effectively wraps up his portfolio of Disney cable channels. However, that business is rapidly declining. According to a recent Wells Fargo report, his 8.2% of all US conventional cable customers canceled connections in the second quarter.

Loeb also wants quicker action on Hulu. In 2019, Disney said it would acquire a one-third stake in streaming service Comcast, which started as a joint venture, for at least $5.8 billion over the next few years. In addition, we hope Disney will buy up its shares early, before the 2024 contract expires.

But it can get expensive. Loeb concedes that Comcast may not want to sell at a reasonable price. Analysts estimate that it would cost him at least $9 billion to buy his Comcast stake in Hulu.

this is what is happening

Apple wants employees to return to the office 3 days a week, from early September. CEO Tim Cook told employees the measure was a “pilot,” but stressed that “face-to-face collaboration, which is so important to our culture,” must begin immediately. . tech giants too cut back We research hiring and spending, and recently fired about 100 recruiters.

Trump’s top officials are nearing a plea deal. Prosecutors have long hoped to overturn Trump’s longtime chief financial officer, Allen Weisselberg. The family does not appear to have provided prosecutors with evidence that they believe they were involved in the crime.

“Smart money” throws stocks away. Yesterday, a series of second-quarter filings from hedge funds Tiger Global, David Tepper’s Appaloosa Management and Scion, run by Michael Barry of “The Big Short,” said: Significant reduction in stock holdings Because recession fears dominated the market.University fund managers at Princeton and Yale as well bearish betBut Warren Buffett’s Berkshire Hathaway snatched Falling Apple stock and George Soros did the same with Amazon.

Peloton does a DIY redesign in time for ChristmasBarry McCarthy, CEO of the struggling exercise bike maker, told Bloomberg that he is looking at a range of cost-cutting measures to turn the company around. Ship the bike to the customer in kit formPeloton has already raised prices and closed some factories, but its stock is down more than 60% this year.

Home Depot and Walmart exceeded expectations. two major retailers Reported better-than-expected sales Even if rising inflation and a shift in spending on services weighed on retailers this year.Walmart stock is owned by the company repeated the expectation Consumers will continue to hold back their spending this year.

A wave of pandemic fraud

At the worst of the pandemic, as the virus forced businesses to close, Congress and federal agencies provided nearly $5 trillion in relief funds in three legislative packages aimed at keeping the economy going.

A huge crash to avoid, the money came with a few strings and minimal oversights. Programs that expanded unemployment benefits, paid employers to keep employees on the payroll, and even expanded a type of disaster loan were all designed to rely on the honor system. The result: A wave of massive fraud likely to be the largest in American history, with thousands of people stealing billions of dollars, reports David A. Fahrenthold of The Times.

Some of the weirdest, most see-through schemes:

• 29 states pay unemployment benefits to the same person.

• Postal Service employees received an $82,900 loan for a project called the “United States Postal Service.”

• Someone got 10 loans for 10 bathroom remodeling projects that don’t exist. Use your burrito shop email address.

Two years later, authorities are pursuing tens of thousands more fraud cases. About 20 government agencies, plus investigators from the FBI, Secret Service, Postal Inspection Service, and Internal Revenue Service, plus 500 people are working on pandemic fraud cases.Labor Department-only agent still working About 39,000The Small Business Administration reviews two million loan applications. And that adds to his 1,500 people already indicted for defrauding pandemic assistance programs. Over 450 people have been convicted.

Kevin Chambers, Chief Pandemic Prosecutor at the Department of Justice, said:

“I limped to the town of Lee, Massachusetts and sat there in the freezing cold for two and a half hours fully charged so I could use another charger…not a great night. ”

— Ethan Zuckerman, professor at the University of Massachusetts Amherst and owner of the Chevrolet Volt. On the alarming lack of national planning For charging electric vehicles. A recent study in the Bay Area found that nearly a quarter of public charging stations are not working.

Crypto’s latest crisis

Blockchain Advocates Prepare to Fight After Treasury Imposes Sanctions Last Week tornado cachecrypto “mixers” to obfuscate digital currency trails, and Dutch prosecutors arrest one of its developers.

Mixers hide the origin of crypto assets and can violate money laundering laws. we Tornado Cash failed to “impose effective controls designed to stop money laundering for malicious cyber actors, including state-sponsored North Korean hackers,” officials said. says. Cryptocurrency advocates say Tornado simply provides computer code that anyone can deploy, for better or worse.

This move could threaten the future of cryptocurrencies. US sanctions apply to Tornado’s smart contracts, which are automatically executed when certain conditions are met. This is the first time the U.S. government has directly applied regulation to a software protocol, said Miller Whitehouse-Levine, policy director at the DeFi Education Fund, a cryptocurrency lobbying group.

“Everybody’s afraid,” he told DealBook. Tornado Cash developers and supporters say no one controls its code, and it is by design.

Treasury ‘beyond legal authority’ Jerry Brito and Peter Van Valkenburgh of advocacy group Coin Center argued: The government’s actions have already had a chilling effect on software development and are considering constitutional challenges on the grounds of free speech and due process, supporters say. (The Treasury Department did not respond to a request for comment on Coin Center’s analysis.)

“Is it illegal to write open source code?” Co-founder of Tornado Cash, Roman Semenov, asked on Twitter last week after the code-sharing platform GitHub’s account was suspended.Semenov said that the tornado cache is not under developer controlStill, the Treasury has vowed to “continue to actively pursue action” and Dutch prosecutors have not ruled out future arrests. legal risk What the industry has relied on. And some analysts predict: worse news soon.

speed lead

bargain

• Collapsed cryptocurrency lender Celsius run out of cash Earlier than expected, court filings revealed that the company owed creditors $2.8 billion. (coin desk)

• Tencent plans to scrap all or most of it. $24 billion equity At Chinese food delivery company Meituan. (Reuters)

• Elliott management and Softbank appear headed for a splitA hedge fund plans to sell nearly $2.5 billion in a technology investment firm. (FT)

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Bernhard Warner contributed to DealBook today.

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