Disney Vote Is About a Lot More Than Just Two Board Seats

But first, who do you have?

If this has been forwarded to you, register here.

The big story

House of Mouse Showdown

Disney is all about imagination – dubbing some employees “Imagineers” – but some investors imagine the iconic company is run differently.

Activist investor Nelson Peltz’s proxy fight against Disney for two seats on the company’s board of directors comes to a head at its annual shareholder meeting today. Business Insider’s Madeline Berg a complete overview of how we got here.

Today’s vote concerns more than just two board seats. This is the future of one of America’s most iconic companies. This is about the state of the media and entertainment industry, in which Disney plays a central role. And it could reshape how Disney CEO Bob Iger, on the job less than two years, second stint in the companycould ultimately be recalled.

Such an ambitious battle it’s not cheap, as BI’s Peter Kafka pointed out. The total amount spent between Disney and its rivals to compete for votes is estimated to be at least $70 million, a record for a proxy fight.

One of the reasons this cost so much, and why this vote is so unique, is the makeup of Disney’s investor base.

Winning the vote isn’t just about convincing large investment firms with significant positions to vote in your favor. Although, big players count toowrites BI’s Grace Eliza Goodwin.

Nearly 40% of Disney stock is privately owned, meaning both parties need to get more creative in their approach. Disney, for example, Used Pinocchio in a presentation to investors.

So where is all this going?

Disney was in good shape at the start of the week, in the lead with more than half of the votes shared, according to a Wall Street Journal report Monday. Both BlackRock and T. Rowe Price reportedly plan to back Disney.

But the fight was closer than Disney would have liked. And Peltz’s Trian Partners reportedly has powerful allies of its own (Neuberger Berman, the California Public Employees’ Retirement System and ISS voting advisor). Peltz previously told the Financial Times that he I would not seek to fire Iger if he wins a seatbut also alluded to change of management in certain entertainment divisions.

It’s also unclear what Trian, who controls about 1.8% of Disney’s stock, would do if he lost his fight. But even in failure, Trian sparked change. DuPont defeated Trian in a proxy battle in 2015, but its CEO resigned later that year and the company accelerated its cost-cutting plans.

This shows the lose-lose situation that proxy battles can sometimes become. Activist campaigns intended to gain support for their cause end up revealing the weaknesses of the companies in which they invest.

3 things about the markets

1. Stocks continue to rise on hopes of a rate cut that hasn’t happened yet, and that’s a problem. Stocks have rallied since October on the belief that interest rate cuts were imminent, despite the Fed’s delays. The growing gap between reality and expectations could cause problems for investorsaccording to JPMorgan.

2. Ray Dalio explains why he continues to invest in China. The billionaire founder of Bridgewater Associates believes it is a good time to buy Chinese stocks despite the pessimism of many market observers. For Dalio, China’s problems are manageable, provided Chinese leaders are “smart and courageous,” he wrote in a LinkedIn post.

3. The IPO market is finally starting to heat up. Reddit, Astera Labs, and Arm Holdings have all made successful trading debuts in recent months. This is a sign that there is rise in the stock market as a risk-driven environment begins to gain momentum, said Quincy Krosby and Jeffrey Buchbinder, strategists at LPL Financial.

3 things in technology

1. Why do we even care about green text bubbles? On iPhones, text from non-Apple phones saves in a gray and green color scheme that has been ridiculed by Apple fans. This is a clever marketing trick that the company used position its product as the “cool” phone.

2. How to get a job at Nvidia. A software engineer at a microchip company explains how he got the job, how much he makes and what potential employees can do to pass the difficult interview process.

3. Microsoft’s poaching has made recruiting difficult for Inflection. The tech giant hired Inflection’s co-founders and most of its staff last month, leaving the AI ​​startup a shell of its former self. A recent hire was “scared” by the newsaccording to an internal email obtained by BI.

3 things in business

1. Elon Musk is having a terrible year. that of Tesla delivery numbers plummet Tuesday in the middle of a “nightmare” neighborhood. THE Slowdown in electric vehicles it’s taking a toll on the company – and analysts say Musk reputation may not help. And that doesn’t mean anything its problems with X and OpenAI.

2. Inside Y Combinator’s new college campus-inspired HQ. Last year, the startup accelerator moved its headquarters from Mountain View to the historic Pier 70 Shipyard. Then, in January, it expanded to 60,000 square feet by moving into the neighboring building.

3. It’s still not easy getting paid as a college athlete. To find out more about so-called NIL transactions, BI spoke with Braden Fiske, Florida State University defensive lineman, who stands to make millions if he is drafted to the NFL in April. He advises students to network and learn to say no to offers.

In other news

What’s happening today

The Insider Today team: Dan DeFrancesco, associate editor and presenter, in New York. Jordan Parker Erb, editor, in New York. Hallam Bullock, editor, in London. George Glover, journalist, in London.