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    Walmart CEO says consumers may not be as resilient next year, even as deflation starts to show

    In a CNBC interview, Walmart CEO Doug McMillon said consumer spending is tougher to predict next year because of rising credit card balances and dwindling household bank accounts.
    Deflation has brought down the prices of some general merchandise items, such as toys, he said.
    Lower prices will mean Walmart and other retailers will have to drive more volume.

    Holiday shoppers are turning to Walmart for groceries and gifts, but CEO Doug McMillon said it’s hard to predict how sales will look in the months after the peak shopping season.
    In an interview with Sara Eisen that aired Wednesday on CNBC’s “Squawk on the Street,” the leader of the world’s largest retailer said higher credit card balances and dwindling household bank accounts raise questions about how much consumers will spend — even after they showed more resilience than expected this year.

    “If we had been talking last spring or at the beginning of last year, I expected more softness by this time of the year than we’re actually experiencing,” he said. But, McMillon added, “next year’s a different story.”
    Deflation in some items is creating a new dynamic for Walmart, McMillon said. In general merchandise, the category that includes electronics, toys and other nonfood items, prices have dropped by about 5% compared with a year ago, he said.
    For example, this holiday season Walmart has 25 toy items under $25, including a Hot Wheels car for $1.18, McMillon said.
    Prices in food categories are about where they were a year ago, though fresh foods tend to fluctuate, he said.
    McMillon said the company has seen the volume of its nonfood sales “start to come back.” Back-to-school helped drive some of that rebound.

    “It’s going to be interesting to watch what happens in the general merchandise categories in the year ahead because prices are so much lower,” he said.
    Walmart has stood apart from many other retailers over the past year, as its large grocery business and low-price reputation have propped up its revenue and stock price during a period when retail sales have weakened. As of Tuesday’s close, Walmart shares had climbed nearly 10% this year, and they hit an all-time high in mid-November.
    The discounter gave a lower-than-expected full-year forecast in November, but unlike Target, Macy’s and other retailers, it projected sales growth. Walmart expects consolidated net sales will rise 5% to 5.5%, and adjusted earnings per share will be $6.40 to $6.48 for the fiscal year.
    Deflation — or falling prices — will bring tough comparisons for Walmart and other retailers. If each item costs less, companies will have to work harder to sell more items.
    McMillon said he’s confident Walmart can drive growth, even in that environment. And, he said, shoppers need pressure on their budgets to ease, too.
    Despite the challenges deflation would create for Walmart, “we’d rather have lower prices than higher prices,” he said.
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    Walmart’s hiring and wage pressures have eased, CEO says

    Walmart CEO Doug McMillon said the hiring and wage environment is “more normalized.”
    In an interview with CNBC, the retail chief said wages are still going up, but “the percentage increase won’t be as much as it was.”
    He said artificial intelligence is also changing employees’ roles across stores and in warehouses.

    A worker stocks the shelves at a Walmart store on January 24, 2023 in Miami, Florida. Walmart announced that it is raising its minimum wage for store employees in early March, store employees will make between $14 and $19 an hour. 
    Joe Raedle | Getty Images News | Getty Images

    After pandemic-fueled higher turnover and fiercer competition for workers, Walmart CEO Doug McMillon said it’s gotten easier to hire people and get them to stick around.
    “It’s more normalized,” McMillon said in an interview with CNBC’s Sara Eisen that aired Wednesday on “Squawk on the Street.” “The unusual employment market that we saw the last few years has changed. We are able to staff around the country. Our turnover’s down. We’ve got more continuity, which is helping a lot.”

    As the nation’s largest private employer and largest grocer, Walmart is closely watched as a barometer of both the health of the consumer and the strength of the country’s labor market. It has about 1.6 million employees in the U.S. This spring, Walmart raised the minimum wage to $14 for store employees. Its previous minimum wage was $12 an hour. Its competitors, Target, Amazon and Best Buy, had already hiked their own minimum wages to $15 an hour.
    Earlier this year, Walmart signalled a potentially cooling labor market, too. It cut the starting pay for new store employees who pick and pack online orders and stock shelves by about a dollar an hour.
    The labor market has cooled according to government data, too. Job openings fell in October to their lowest level in two and a half years, the Labor Department reported. The ratio of job openings to available workers is nearly at pre-pandemic levels, with the ratio at 1.3 to 1.
    McMillon said in the interview that aired Wednesday that even when gearing up for the busier holiday season, the company did minimal hiring because it was “pretty much staffed.”
    During the pandemic, on the other hand, Walmart’s workforce faced a lot of change and complexity, he said. The company hired bartenders, waiters and other people who were out of work and new to retail. It also dealt with store workers who had to take leave when sick with Covid.

    He said wages are still going up, but “the percentage increase won’t be as much as it was.”
    “It’s more normalized as well,” he said.
    Yet for U.S. consumers, the road ahead isn’t as clear. He said next year could bring tighter budgets at households, even as prices fall on some items.
    Generative artificial intelligence has started to change employees’ jobs, too, McMillon said. As the company drives greater productivity with the technology, he said he expects the workforce to stay the same size, but shift to different roles.
    He said he expects fewer employees in store backrooms, but more on the sales floor. As Walmart adds automation to its supply chain, he said employees will supervise rather than take on physically intensive tasks.
    “That’s what we’d really like, to have people extend their careers and be able, when work is over, to be able to go coach their kids’ soccer teams instead of being tired because they lifted so much weight all day,” he said. More

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    Women’s sports, NFL’s Swift bump and Messi helped define a big year in ticket sales, StubHub says

    Women’s sports saw a major increase in ticket sales this year, StubHub said.
    Lionel Messi’s U.S. debut provided a major boost to MLS and Inter Miami.
    Taylor Swift brought strong ticket demand for the NFL’s Kansas City Chiefs this season.

    Addison O’Grady #44 of the Iowa Hawkeyes rebounds against LaDazhia Williams #0 of the LSU Lady Tigers during the 2023 NCAA Women’s Basketball Tournament National Championship at American Airlines Center on April 2, 2023 in Dallas, Texas.
    C. Morgan Engel | Ncaa Photos | Getty Images

    Women’s sports had a banner year in 2023, according to a new report released by StubHub on Wednesday.
    Ticket sales for women’s sports on the platform boomed to record growth, according to the resale site’s Year in Live Experiences report.

    Nowhere was that more true than in college sports. Demand for women’s basketball Final Four tickets on StubHub was higher than it was for men’s basketball Final Four seats for the first time, as the LSU Lady Tigers went on to win their first NCAA championship. Total sales were six times higher than in last year’s women’s tournament, and ticket prices were 15% higher than in the 2023 men’s Final Four.
    Football often dominates the U.S. sports landscape, but don’t tell that to Nebraska. The Nebraska Cornhuskers women’s volleyball team fetched a 60% higher average ticket price on StubHub than Cornhuskers football did this year.
    Nebraska’s matchup against the University of Nebraska Omaha Mavericks on Aug. 30 set the world record for women’s sports attendance with 92,003 fans. Stubhub said it was the site’s bestselling volleyball game ever.
    “It doesn’t matter what sport, college sports have seen a massive uptick in demand across all live events, and certainly on the women’s side,” said Adam Budelli, a StubHub spokesperson.
    The WNBA also scored big in 2023, as attendance rose 16% and viewership jumped 21% year over year, the league’s most-watched season in 21 years. Trends on StubHub mirrored the league’s broader success.

    StubHub said overall ticket sales for the 2023 WNBA season more than doubled from the prior year. Sales for the Las Vegas Aces’ WNBA Finals victory over the New York Liberty were StubHub’s highest ever for the league’s championship series, tripling from the previous season.
    Women’s soccer was also on a roll. As the National Women’s Soccer League breaks new milestones in areas from attendance to viewership and team valuations, Stubhub said ticket sales for the season doubled those from 2022. Angel City FC, the team owned by celebrities such as Natalie Portman and Serena Williams, was the highest-selling club on the platform, as sales spiked 62% compared with 2022.
    Finally, sales for women’s tennis jumped 30% versus 2022, as the number of tickets sold climbed 42%. Once Coco Gauff secured her spot in the U.S. Open finals, total sales increased 20% overnight, StubHub said.
    StubHub saw several other key trends emerge in what it called a strong year for sports ticket sales.

    The Messi effect is real

    Inter Miami forward Lionel Messi (10) celebrates after scoring a goal against Orlando City in the first half of a Leagues Cup Round of 32 match at DRV PNK Stadium on Wednesday, Aug. 2, 2023, in Fort Lauderdale, Florida. (Matias J. Ocner/Miami Herald/Tribune News Service via Getty Images)
    Matias J. Ocner | Miami Herald | Getty Images

    Lionel Messi’s U.S. debut captured the world’s attention — and ticket buyers’ wallets. Stubhub saw average ticket prices for Inter Miami games nearly triple after the superstar signed with the team in June.
    Not surprisingly, Inter Miami rose to become the bestselling club, outselling the No. 2 team, LAFC, by 85%.
    Messi wasn’t just good for Miami. He also helped drive ticket sales on the road. For example, LAFC averaged about $145 per ticket on StubHub for the season — when the team hosted Inter Miami, the average price rose to more than $800.
    Budelli said StubHub expects MLS sales will increase again next year, particularly among international fans.

    The NFL (Taylor’s Version)

    Taylor Swift and Brittany Mahomes react during a game between the Los Angeles Chargers and Kansas City Chiefs at GEHA Field at Arrowhead Stadium on October 22, 2023 in Kansas City, Missouri.
    David Eulitt | Getty Images

    Taylor Swift’s influence on the NFL season — not to mention her dominance of the music world — showed in StubHub’s data.
    “Taylor Swift is certainly the story of 2023 whether it’s her own tour or the excitement she brought the NFL,” Budelli said.
    The pop singer’s relationship with tight end Travis Kelce meant America’s sweetheart was a frequent guest at Kansas City Chiefs games. The “Blank Space” singer not only helped TV ratings, but also ticket sales.
    After Swift’s first appearance at the Sept. 24 Chiefs game, StubHub saw sales for Chiefs home games more than triple.
    Off the football field, Swift’s Eras Tour was the biggest in StubHub’s history. She was also the most searched act in 2023.
    Looking ahead to 2024, StubHub is banking on another strong year of Swift sales, as U.S. buyers account for over half of tickets purchased for Swift’s international shows in 2024 on StubHub and viagogo, another platform StubHub owns.

    Vegas in the spotlight

    Ferrari driver Carlos Sainz of Spain drives past the Sphere during the F1 Las Vegas Grand Prix on Saturday, November 18, 2023 on the Las Vegas Street Circuit in Las Vegas, NV.
    Icon Sportswire | Icon Sportswire | Getty Images

    The ticketing company said it is paying close attention in 2024 to Las Vegas, which will hold its first Super Bowl next year.
    Sin City vaulted into the sports scene in recent years, and ticket demand is closely following suit. The Stanley Cup-winning Vegas Golden Knights are the bestselling NHL team in 2023 on StubHub, with tickets sales nearly triple those of last year. The NFL’s Las Vegas Raiders are the third-highest selling team in that league.
    StubHub is also watching Formula 1 closely, as the races made up nearly 40% of its top events in 2023.
    In November, the Formula 1 Las Vegas Grand Prix brought in fans from all over the world, making it the third most popular U.S. event for international buyers on StubHub.
    Budelli also said the Vegas Sphere, the immersive concert and event venue that opened in September, has quickly become a big international draw. StubHub expects it will continue to boost ticket sales.
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    Mortgage refinance demand jumps 14% as rates fall to lowest point since August

    The rate for the popular 30-year mortgage fell back toward 7% after hitting 8% earlier this fall.
    Applications to refinance a home loan Index increased 14% from the previous week and were 10% higher than the same week one year ago.
    Applications for a mortgage to purchase a home fell 0.3% for the week and were 17% lower than a year earlier.

    Homes in Hercules, California, US.
    Bloomberg | Bloomberg | Getty Images

    After surging over 8% in October, mortgage rates are falling back toward 7% again, and that is jump-starting the refinance market.
    Last week, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 7.17% from 7.37%, with points dropping to 0.60 from 0.64 (including the origination fee) for loans with a 20% down payment, according to the Mortgage Bankers Association. That was the lowest level since August.

    As a result, applications to refinance a home loan increased 14% from the previous week and were 10% higher than the same week one year ago.
    “Slower inflation and financial markets anticipating the potential end of the Fed’s hiking cycle are both behind the recent decline in rates,” said Joel Kan, MBA vice president and deputy chief economist. “Refinance applications saw the strongest week in two months and increased on a year-over-year basis for the second consecutive week for the first time since late 2021.”
    The actual level of refinance demand, however, is still quite low, given that so many borrowers refinanced in the first years of the Covid pandemic, when rates hit more than a dozen record lows.
    “Recent increases could signal that 2023 was the low point in this cycle for refinance activity, consistent with our originations forecast,” Kan added.
    Applications for a mortgage to purchase a home fell 0.3% for the week and were 17% lower than the same week a year earlier. Potential buyers are still battling high prices and low inventory of homes for sale.

    Mortgage rates continued to move lower this week. The government’s all-important monthly employment report, expected to be released Friday, could either continue that trend or reverse it, depending on what it says about the state of the economy.
    “November was a stellar month for mortgage rates, and December is picking up right where it left off,” said Matthew Graham, chief operating officer at Mortgage News Daily. He noted that a softer-than-expected report on job openings released Tuesday helped continue the trend.
    “The labor market had been running too hot. Job openings are still ‘above-trend,’ in fact, but by cooling off at a faster pace, there are positive implications for interest rates,” Graham added.  
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    Goldman Sachs is betting on the small cap rally. Here’s how.

    Small cap stocks are undergoing a resurgence, and Goldman Sachs Asset Management is looking to capitalize on it through the exchange-traded fund space.
    “In the last five weeks, we’ve launched three new active products. Two are the premium income. One, believe it or not, is small cap core,” Brendan McCarthy, the firm’s managing director of exchange traded funds, told CNBC’s “ETF Edge” on Monday. “This is our first active small cap ETF, and that’s very much on the back of investor demand.”

    It’s called the Goldman Sachs Small Cap Core Equity ETF and it’s up almost 8% since its early October launch date. Meanwhile, the Russell 2000, which tracks small cap stocks, is up more than 7% in that same time frame as of Tuesday’s market close.
    According to the fund’s website, top holdings include Federal Signal Corp, Meritage Homes and Onto Innovation.
    Despite recent appetite for small caps, the Russell 2000 is still underperforming the broader S&P 500 index by about 13% so far this year.

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    Vietnamese companies eye the U.S. IPO market amid a lull in Chinese listings

    “Something like VinFast puts [Vietnam] on the map,” said Johan Annell, Beijing-based partner at ARC Group. It sends a message that “despite capital controls, which I think is the major formal barrier for companies, it is possible for them to do IPOs.”
    Firms that scour for potential IPO clients years in advance say they are talking to more companies in Vietnam and the surrounding region.
    Vietnam’s gross domestic product surged 3.6 times on a per capita basis between 2002 and 2022, to nearly $3,700, according to the World Bank.

    A VinFast EV car on display at the New York Auto Show, April 13, 2022.
    Scott Mlyn | CNBC

    BEIJING — A new group of Asia-based companies are contemplating initial public offerings in the U.S., where international listings were once driven mostly by Chinese startups.
    Vietnam-based electric car company VinFast broke new ground with its U.S. listing in August, via its merger with the U.S.-listed special purpose acquisition company Black Spade Acquisition.

    While not strictly an IPO, the listing was soon followed by Vietnamese tech unicorn VNG’s filing to list on the Nasdaq. VNG’s products include gaming, fintech and music streaming.
    “Something like VinFast puts the [country] on the map,” said Johan Annell, Beijing-based partner at ARC Group.
    It sends a message that “despite capital controls, which I think is the major formal barrier for companies, it is possible for them to do IPOs,” he said.

    VNG noted in its prospectus that Vietnamese law prevents “foreign investors” from owning more than 49% of the capital used to establish a local company operating in gaming and certain other sectors. As a result, VNG is part of a reorganization which uses a Cayman Islands holding company to list in the U.S., the filing said.
    “Our corporate structure involves unique risks, has not been tested in any court and may be disallowed by Vietnamese regulatory authorities,” the filing said.

    It’s unclear when VNG will go public. But firms that scour for potential IPO clients years in advance say they are talking to more companies in Vietnam and the surrounding region.
    As local companies grow, “they are outgrowing the ability of those markets to provide the capital that they need,” said Drew Bernstein, co-chairman of accounting firm MarcumAsia. “It’s still the very early stages of the game.”
    Bernstein said he attended investing conferences in Malaysia and Vietnam in late October, where many of the attendees were the same people who’d he’d met over the last 10 to 15 years in the China-U.S. IPO circuit.
    Since the fallout over Didi in the summer of 2021, regulation and a tepid U.S. IPO market have stalled most Chinese listing plans. Only one of the 20 China-based companies that listed in the U.S. this year raised more than $50 million, according to Renaissance Capital.
    Investor relations, capital markets advisory and financial media relations firm The Blueshirt Group has also worked with many Chinese companies to list in the U.S.
    But the firm’s managing director, Gary Dvorchak, said Blueshirt organized a seminar in April with 20 to 30 Vietnamese-based companies about the path to a U.S. IPO. Many of the companies were in tech, such as payments, online games and e-commerce, he said.
    “Just in contrast the rest of Asia there’s nothing in Thailand, some in Indonesia,” he said. “So the fact that you see so many in Vietnam is really meaningful.”

    A growing startup ecosystem

    CNBC reached out to about two dozen startups with headquarters or a major office in Vietnam to ask about their U.S. IPO plans. Most of those who responded indicated any listing was still a ways off, but noted rapid growth in local startups over the last 15 years.
    “Capital available to Vietnamese startups has increased tremendously compared to 10 years ago,” said Nguyen Nguyen, CEO of fintech startup Trusting Social, whose offices in the region include Singapore and Vietnam.
    He added the growing startup ecosystem has attracted many people of Vietnamese heritage to return to their home country, while domestic economic growth has increased the market size for local players.
    Vietnam’s gross domestic product surged 3.6 times on a per capita basis between 2002 and 2022, to nearly $3,700, according to the World Bank.
    ELSA, which uses artificial intelligence to help people learn English, is based in the U.S. while co-founder and CEO Vu Van hails from Vietnam. She said given the success of Southeast Asian ride-hailing company Grab, more Vietnamese companies are starting to look beyond the domestic market to regional business.
    For ELSA, “when we started the company our aspiration has always been a global business with a global footprint,” Van said, adding that a “U.S. IPO would help us with that global footprint.”
    Out of 103 U.S. IPOs this year, 10 were from companies based in Southeast Asia — split between Singapore and Malaysia, according to Renaissance Capital data as of Nov. 29.
    “It is unusual to see this many listings from Asian companies outside of China,” the firm said. “However, none of these are of a significant size.”
    George Chan, global IPO leader at EY, expects “a lot” of companies from Southeast Asia will reach the IPO stage in the next 12 to 18 months, and might also consider the Hong Kong exchange.

    Read more about China from CNBC Pro

    The trend is not replacing Chinese IPOs in the U.S., Bernstein said, but rather creating new opportunities. MarcumAsia is expanding its offices in Beijing, Tianjin, Guangzhou and Shanghai, and opened an office in Hong Kong this fall.
    MarcumAsia opened an office in Singapore in May 2022 and doesn’t have plans for other offices in Southeast Asia right now, he said. “There haven’t been enough large deals done in the markets outside of China to give people the sense of security that they can get the deal done.”
    Ultimately, global IPO markets need to recover before any company can make serious plans.
    “There is definitely a very robust pipeline of companies from Southeast Asia who are evaluating the U.S. markets,” Bob McCooey, a vice chairman at Nasdaq, said in a phone interview this fall. He noted that given market conditions, many companies are delaying their listing plans to the first half of next year. More

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    CVS to change how it prices prescription drugs with new pharmacy reimbursement model

    CVS Health said it will revamp how it prices prescription drugs, doing away with a complex model that typically determines how much pharmacies get reimbursed and how much patients pay for medications. 
    The new effort makes CVS the latest company to try to upend the traditional prescription drug pricing system, which has faced years of political scrutiny for what critics call a lack of transparency and inflated health-care costs for U.S. consumers. 
    CVS will launch a new model for reimbursing its pharmacies on Jan. 1, 2025, executives said during the company’s 2023 investor day. 

    A person walks by a CVS pharmacy store in Manhattan, New York, U.S., November 15, 2021.
    Andrew Kelly | Reuters

    CVS Health on Tuesday said it will revamp how it prices prescription drugs and scrap a complex model that typically sets how much pharmacies get reimbursed and what patients pay for those medications.
    The new effort makes CVS the latest company to try to upend the traditional prescription drug pricing system, which has faced years of political scrutiny for what critics call a lack of transparency and inflated health-care costs for U.S. consumers. 

    CVS will launch a new model for reimbursing its pharmacies on Jan. 1, 2025 for commercial payors, executives said during the company’s 2023 investor day. 
    CVS’ new model could change the cost of prescription drugs for some patients, but it will not necessarily make all medicine cost less, company executives said. Some dcirugs may cost less, while prices of others might rise, they noted. But more prescription costs should fall than climb for consumers, employers and health insurers, according to the executives.
    Still, CVS is “committed to lowering drug pricing” and making the process more transparent, CEO Karen Lynch said on CNBC’s “The Exchange” on Tuesday.
    “What this does is it essentially aligns the economics of our pricing for drugs to what consumers will pay at the pharmacy counter,” Lynch said of the new model. “What people have been saying is, ‘We don’t understand, it’s not transparent, it’s not easy to understand how much drugs cost.'”
    “We’re changing that,” she added.

    Shares of CVS closed nearly 4% higher on Tuesday following the company’s investor day, where it also issued a better 2024 revenue forecast than Wall Street expected.
    CVS said the plan, named CVS CostVantage, will use a “sustainable and transparent” formula to determine a medication’s price and the corresponding reimbursement pharmacies receive from pharmacy benefit managers. Those middlemen negotiate drug discounts with manufacturers on behalf of health insurers, large employers and others that contract them. 
    Under the new model, CVS’ more than 9,000 retail pharmacies will get reimbursed by PBMs and other payors based on the cost of the drug, a “clearly defined” markup, and a fee to cover handling and dispensing the prescriptions, said Prem Shah, president of CVS’ pharmacy and consumer wellness segment, during the company’s investor day. 
    Lynch told CNBC: “It’s a cost plus markup, plus a fee. And that’s the transparency of what we’re trying to do.”
    Currently, pharmacies are typically paid using a complicated system not directly based on what they spent to purchase drugs. That model, which involves a multitiered network of insurers, drug manufacturers, PBMs and pharmacies, leads to ambiguity around fees and markups added to the original cost of a drug.
    Billionaire Mark Cuban last year launched an online pharmacy that takes a similar approach to CVS’ new reimbursement model. The company, called Cost Plus Drugs, aims to drive down the price of medicines broadly by selling them at a set 15% markup over their cost, plus pharmacy fees.
    Cuban said in an email to CNBC that he has “no reaction at all” to CVS’s new model.

    More CNBC health coverage

    Cuban’s venture is already shaking up the broader health-care industry: CVS suffered a blow over the summer when a major California health insurer, Blue Shield of California, announced it will no longer use the company as its PBM and instead will partner with several companies, including Cuban’s firm and Amazon Pharmacy. 
    CVS Health’s Caremark is one of the major PBMs in the U.S. Caremark and other PBMs have faced increased scrutiny over their role in surging drug costs, and the Federal Trade Commission is also investigating their practices.
    Cuban’s drug company has put pressure on other companies that manage drug benefits to make their own changes. For example, Cigna announced last month that its PBM will offer a pricing model similar to Cost Plus Drugs. 
    The Biden administration is taking its own steps to rein in prices of medications.
    As part of the president’s Inflation Reduction Act, the administration in August announced the first 10 prescription drugs that will be subject to drug price negotiations with the federal Medicare program, which aims to make costly medications more affordable for older Americans.
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    Activist investor urges Disney to add Trian’s Nelson Peltz to its board

    Activist investor Ancora issued a letter to Disney shareholders urging the company to add Nelson Peltz to its board.
    The endorsement comes after Peltz and his firm Trian Fund Management launched a proxy fight last week.
    The investor says that change in Disney’s boardroom is “certainly warranted.”

    Disney World’s Magic Kingdom in Orlando, Florida.
    Joe Raedle | Getty Images News | Getty Images

    Activist investor Ancora on Tuesday urged Disney to put Nelson Peltz on its board, days after Peltz and his firm, Trian, launched a proxy fight with the entertainment giant.
    “In an effort to avert an election contest following a year of distractions and disappointing performance, we hope you join us in encouraging the Board to pursue a viable compromise with Trian Fund Management, L.P. and Nelson Peltz,” Ancora wrote in the letter. “Mr. Peltz (or a qualified designee) would make a fantastic addition to Disney’s Board.”

    Ancora also suggested that much of Disney’s difficulties in recent years — including streaming losses and and several box office flops — could be pinned on the company board.
    “A degree of shareholder-driven change is certainly warranted in Disney’s boardroom following an extended period of absentminded governance, ineffective succession planning, polarizing actions and sustained value destruction,” Ancora said Tuesday. “While it has been argued that challenges largely stem from the tenure of Bob Chapek, the Board was in the driver’s seat before, during and after that time.”
    Disney fired back at Trian last week, suggesting that the move was fueled by a personal grudge against Disney CEO Bob Iger held by Peltz ally and former Marvel boss Ike Perlmutter. Trian oversees about $3 billion in Disney stock, but the overwhelming bulk of the shares is owned by Perlmutter, whom Disney laid off earlier this year. Trian is seeking more than two seats on Disney’s board, which is populated by directors seen as loyal to Iger.
    Ancora’s announcement Tuesday didn’t disclose the size of its stake in Disney. Ancora owned more than 60,000 shares of Disney as of September, according to FactSet. That would be equivalent to an approximately $6 million stake as of Tuesday.
    Disney had a market cap of about $160 billion as of Tuesday, its shares closing down by more than 1%. The stock is up more than 4% this year, underperforming the broader S&P 500.

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