If you've followed legendary stock-picker Jim Cramer over the past few years you know that he has been one of Disney's biggest boosters.
Since the media conglomerate purchased Fox's movie studio and entertainment division for more than $70 billion in 2017, Cramer's base case for Disney (DIS) -) has been that it will emerge as the media king among its rivals at Paramount Global (PARA) -) and NBCUniversal (CMCSA) -).
Related: Disney to buy remaining stake in Hulu as Peltz returns to push for board seats
But that trajectory has gone off kilter in recent quarters as the company's once dominant movie division has failed to produce a bona fide hit in some time and the company's ESPN division — once its crown jewel property — struggles to navigate the post-cord cutting television landscape.
Disney stock is up less than 6% year to date, thanks largely to a two-week rally that has reversed the course of the stock after it hit a 10% year-to-date decline in late October.
CNBC's Jim Cramer seems to place the blame for the company's struggles at the feet on one man: CEO Bob Iger.
"I kept thinking, how could it be so hard to turn around the best intellectual property company in the history of the world. Turns out the answer is real hard," Cramer told subscribers to his investing club this week.
"The company has a huge amount of bloat, or the CEO wouldn't have just said he can whack out $7.5 billion in costs instead of $5 billion like he said a couple of months ago."
Cramer still has a bullish outlook, saying that when the company finishes purchasing the remaining stake in Hulu it does not already own, Disney as a streaming model can be more like "the winning Netflix."
But there is still one big obstacle in the way, according to Cramer.
"I take myself to task for believing that a franchise can trump bad management. It didn't. Now the stock is starting to come back and I'm grateful for that. I don't think Nelson Peltz is done trying to stir the pot and bring some much needed challenge to the board room, which it should have," Cramer said.
Earlier this week, the Wall Street Journal reported that billionaire activist investor Nelson Peltz has reached a deal with former Disney executive Isaac Perlmutter that gives Peltz's Trian Fund Management control and voting power over the former Marvel Entertainment chairman's stake.
Peltz, who has been pushing for a seat on the board since late last year, now has around four times the voting shares he had when he first pushed for a Disney board seat earlier this year, the Journal reported.
Check out Cramer's full comments on Disney below:
It hasn't been a magical ride with Disney, but I shared the latest developments that impact our thesis for the Investing Club. $DIS pic.twitter.com/2mMHwK4mCM
— Jim Cramer (@jimcramer) November 15, 2023
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