“Nelson Peltz should definitely be on the Disney board!” So posted Tesla’s Elon Musk on his X platform, formerly Twitter, earlier this month in support of the activist shareholder, just after Peltz lost a shareholder vote battle to get himself onto the board of the entertainment heavyweight.
“He would help reform the company, improve the quality of product and generally serve in the best interests of shareholders, as he has done at many other companies. This would significantly improve Disney’s share price,” Musk continued. “I would definitely buy their shares if Nelson were elected to the board. His track record is excellent.”
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It might be slightly surprising to see Musk in such full-throated support for an activist investor. After all, this is a man who, as recently as January, was worrying about the risk that he “could be voted out by some sort of random shareholder advisory firm.”. He then went on to jokingly dub leading proxy advisory firm Institutional Shareholder Services (ISS) as “Isis” and suggest that “there are a lot of activists that basically infiltrate… organisations and have strange ideas about what should be done”.
Ironically, ISS supported Peltz in his fight to get on the Disney board. As for Musk, he seems to bear two grudges against Disney and its CEO Bob Iger — one around the firm pulling advertising on X, the other around him seeing the firm on the other side of the fence in the Tesla CEO’s frankly baffling obsession with waging an online ‘war on wokeness’.
Baffling because it is getting ever clearer, as EV inFocus has been cautioning for months, that Musk’s right-wing extremist dog whistling on social media is having a material negative impact on the sentiments of the core demographic of current and future Tesla buyers towards Musk, his firm and its products.
To some extent, then, Peltz is a friend on an ‘enemy’s enemy’ basis. But it may be more than this. Musk was pictured in February arm-in-arm with Peltz at the premiere of a film made by Peltz’ daughter.
Be careful what you wish for
If Musk believes that Peltz is genuinely a friend, he would not be the first CEO of a major US company to think so. In October 2015, when Peltz’ Trian Partners investment vehicle disclosed a $2.5bn investment in conglomerate GE, it was the culmination of a muti-year buddying-up campaign by CEO Jeff Immelt to bring Peltz, who he believed was an ally, into GE’s stock.
Fast forward two years and Trian was both ousting Immelt from his role and installing Ed Garden, Peltz’ son-in-law, onto the GE board. A further year down the line, Immelt’s in-house successor was gone too, replaced by Larry Culp, an independent board member and Trian ally.
And Culp’s main move has been to dismember the old GE, splitting it into three separate companies. TLDR, a CEO thought he was friendly with Peltz, brought him into his company, after which Peltz booted him out and got someone else in to split the firm apart.
Film premieres and social media cheerleading are one thing. But experience suggests Musk might be best advised not to encourage Peltz to invest in his sprawling empire of car making, chargers, batteries, software and robotics.
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