Activist investor Blackwells Capital recently expressed concerns about Walt Disney’s artificial intelligence (AI) and augmented reality (AR) capabilities, suggesting that the entertainment giant is falling behind other industry leaders in research and development spending.
Call for Change
In a presentation filed on Monday, Blackwells urged Disney to adopt a more technology-focused approach, drawing attention to the absence of a designated chief technology officer to oversee all technological endeavors within the company.
Chief investment officer Jason Aintabi highlighted the potential for improvement in Disney’s content, governance, and technology sectors, emphasizing that the addition of three nominated board members could address these issues. Notably, companies like Netflix, Amazon, and Apple boast top tech chiefs while Disney remains without one.
Vision for the Future
Blackwells argued that Disney’s stock performance has been lackluster but could see a remarkable upswing of up to 129% by embracing AI and spatial computing technologies. The firm painted a picture of immersive theme park experiences featuring augmented-reality 3-D lightsaber battles and virtual safaris with beloved characters from “The Lion King.”
Disney’s Response
While Disney refrained from commenting on Blackwells’ critique, the company reiterated its commitment to enhancing shareholder value through strategic initiatives. These include plans to reinstate and increase its cash dividend, repurchase $3 billion in shares in 2021, and achieve cost savings of at least $7.5 billion by fiscal year 2024.
Disney remains optimistic about generating $8 billion in free cash flow and reaching profitability with its direct-to-consumer streaming services by the fourth quarter of fiscal 2024. The company stands by its own roster of 12 board nominees and has been vocal in opposing the nominations put forth by activists Trian Fund Management and Blackwells.
Shareholder Standoff
ValueAct, another activist fund, has aligned with Disney’s board nominees, setting the stage for a showdown at the company’s upcoming annual shareholders meeting on April 3. As the battle for board seats intensifies, shareholders are poised to determine the direction of Disney’s technological evolution in the ever-changing entertainment landscape.
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