Business News
Nelson Peltz lays out his case for Disney proxy fight, slams Fox acquisition


Disney is facing a proxy fight as Nelson Peltz’s activist firm Trian Fund Management pushes for a seat on its board.
Peltz spoke on CNBC’s “Squawk on the Street” on Thursday, making his case for the fight his firm has picked with Disney, raising issues with Disney’s $71 billion acquisition of Fox in 2019 and how the company has eroded shareholder value in recent years.
“Fox hurt this company. Fox took the dividend away. Fox turned what was once a pristine balance sheet into a mess,” Peltz said Thursday.
On Thursday, the activist firm filed a preliminary proxy statement looking to put Peltz on Disney’s board.
To preempt what could be a messy proxy battle and opposing Trian, Disney on Wednesday announced that Mark Parker, the executive chairman of Nike, would become the new chairman of the board. Disney’s board will now have 11 members.
The activist firm said it owns about 9.4 million shares valued at approximately $900 million, which it first accumulated a few months ago. Trian said Wednesday it believes Disney “lost its way resulting in a rapid deterioration in its financial performance.”
Peltz also said he wants to be on the board so he can get access to internal numbers and tell other members if they’re missing out on opportunities.
“I don’t need to overwhelm them,” Peltz told CNBC. “I don’t need more than one person on the board.”
Shares of Disney were up about 3% on Thursday.
Peltz’s grievances

Trian called out what it viewed as poor corporate governance on Disney’s part, including failed succession planning, “over-the-top” compensation practices and Disney’s lack of engagement with Trian in recent months.
In public filings Thursday, Trian listed its numerous meetings with Disney and its board members, beginning with then-CEO Bob Chapek, Peltz and their wives over lunch in July. Meetings and correspondence between Trian and Disney ramped up in frequency in November, according to the filing.
Peltz on Thursday said he only had a meeting with Disney’s board that spanned about 45 minutes, but he never heard a response from them. A Disney representative didn’t immediately respond to comment.
Peltz also noted that Disney was open to making him a board observer, allowing him to sit in on meetings and give advice on operations, but without voting privileges.
“I don’t need to overwhelm them. I just need to speak reasonably to these people and explain to them where they went wrong or what opportunities they’re missing,” Peltz said Thursday, noting companies other where he’s sat on the board.

In November, Bob Iger made a surprising return to Disney’s helm, ousting Chapek – whom Iger chose as his successor – following a poor earnings report. Trian has said it doesn’t want to replace Iger, but rather work with him to ensure a successful CEO transition within the next two years.
Parker will take over as chairman from Susan Arnold, and will be tasked to lead succession planning, according to Disney’s announcement on Wednesday.
In Thursday’s filing, Trian also called out Disney’s streaming strategy, saying it is “struggling with profitability, despite reaching similar revenues as Netflix and having a significant IP advantage.” The firm also criticized what it believes is Disney’s lack of cost discipline and overearning at its theme parks business to subsidize streaming losses.
Disney’s stock had a rough 2022, coming out of the early days of the pandemic, when theme parks and movie theaters were shut down. However, as subscriber growth for streaming slowed and investors raised questions about profitability, while cord-cutting ramped up, most media stocks fell last year.
On Thursday, Peltz said Disney either needs to get out of the streaming business, or buy Hulu. “They must buy Hulu, that unfortunately means the company will have a debt load going forward for several years,” Peltz said.
While Disney+ is the company’s main play in streaming, Disney also owns two-thirds of Hulu and has an option to buy the remaining stake from Comcast as early as January 2024.
Last year, Disney also announced it would proceed with cost-cutting measures, including a hiring freeze that Iger has upheld.
Watch on CNBC’s full interview with Nelson Peltz on PRO:

Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC.
Business News
Lucid to cut 1,300 workers amid signs of flagging demand for its EVs


Lucid Motors CEO Peter Rawlinson poses at the Nasdaq MarketSite as Lucid Motors (Nasdaq: LCID) begins trading on the Nasdaq stock exchange after completing its business combination with Churchill Capital Corp IV in New York City, New York, July 26, 2021.
Andrew Kelly | Reuters
Struggling EV maker Lucid said in a regulatory filing on Tuesday that it plans to cut about 18% of its workforce, or roughly 1,300 employees, as part of a larger restructuring to reduce costs as it works to ramp up production of its Air luxury sedan.
Lucid said it will incur one-time charges totaling between $24 million and $30 million related to the job cuts, with most of that amount being recognized in the first quarter of 2023.
News of the job cuts was first reported by Insider earlier on Tuesday. Lucid’s shares closed down over 7% on Tuesday following the Insider report.
In a letter to employees, CEO Peter Rawlinson said the job cuts will hit “nearly every organization and level, including executives,” and that affected employees will be notified over the next three days. Severance packages will include continued healthcare coverage paid by Lucid, as well as an acceleration of equity vesting, Rawlinson wrote.
Lucid ended 2022 with about $4.4 billion in cash on hand, enough to last until the first quarter of 2024, CFO Sherry House told CNBC last month ahead of the company’s fourth-quarter earnings report. But there have been signs that demand for the high-priced Air has fallen short of Lucid’s internal expectations, and the company may be struggling to convert early reservations to sold orders.
Lucid said that it had more than 28,000 reservations for the Air as of Feb. 21, its most recent update. But it also said that it plans to build just 10,000 to 14,000 vehicles in 2023, far fewer than the roughly 27,000 that Wall Street analysts had expected.
With Lucid’s factory currently set up to build about 34,000 vehicles per year, the company has warned of continuing losses.
“As we produce vehicles at low volumes on production lines designed for higher volumes, we have and we will continue to experience negative gross profit related to labor and overhead costs,” House said during Lucid’s earnings call on Feb. 22.
Lucid hasn’t yet announced a date for its first-quarter earnings report.
Business News
Virgin Orbit extends unpaid pause as Brown deal collapses, ‘dynamic’ talks continue


NEWQUAY, ENGLAND – JANUARY 09: A general view of Cosmic Girl, a Boeing 747-400 aircraft carrying the LauncherOne rocket under its left wing, as final preparations are made at Cornwall Airport Newquay on January 9, 2023 in Newquay, United Kingdom. Virgin Orbit launches its LauncherOne rocket from the spaceport in Cornwall, marking the first ever orbital launch from the UK. The mission has been named Start Me Up after the Rolling Stones hit. (Photo by Matthew Horwood/Getty Images)
Matthew Horwood | Getty Images News | Getty Images
Virgin Orbit is again extending its unpaid pause in operations to continue pursuing a lifeline investment, CEO Dan Hart told employees in a company-wide email.
Some of the company’s late-stage deal talks, including with private investor Matthew Brown, collapsed over the weekend, people familiar with the matter told CNBC.
Hart previously planned to update employees on the company’s operational status at an all-hands meeting at 4:30 p.m. ET on Monday afternoon, according to an email sent to employees Sunday night. At the last minute, that meeting was rescheduled “for no later than Thursday,” Hart said in the employee memo Monday.
“Our investment discussions have been very dynamic over the past few days, they are ongoing, and not yet at a stage where we can provide a fulsome update,” Hart wrote in the email to employees, which was viewed by CNBC.
Brown told CNBC’s “Worldwide Exchange” last week he was in final discussions to invest in the company. A person familiar with the terms told CNBC the investment would have amounted to $200 million and granted Brown a controlling stake. But discussions between Virgin Orbit and the Texas-based investor stalled and broke down late last week, a person familiar told CNBC. As of Saturday those discussions had ended, the person said.
Separately, another person said talks with a different potential buyer broke down on Sunday night.
The people asked to remain anonymous to discuss private negotiations. A representative for Virgin Orbit declined to comment.
Hart promised Virgin Orbit’s over 750 employees “daily” updates this week. Most of the staff remain on an unpaid furlough that Hart announced on Mar. 15. Last week, a “small” team of Virgin Orbit employees returned to work in what Hart described as the “first step” in an “incremental resumption of operations,” with the intention of preparing a rocket for the company’s next launch.
Virgin Orbit’s stock closed at 54 cents a share on Monday, having fallen below $1 a share after the company’s pause in operations.
Virgin Orbit developed a system that uses a modified 747 jet to send satellites into space by dropping a rocket from under the aircraft’s wing mid-flight. But the company’s last mission suffered a mid-flight failure, with an issue during the launch causing the rocket to not reach orbit and crash into the ocean.
The company has been looking for new funds for several months, with majority owner Sir Richard Branson unwilling to fund the company further.
Virgin Orbit was spun out of Branson’s Virgin Galactic in 2017 and counts the billionaire as its largest stakeholder, with 75% ownership. Mubadala, the Emirati sovereign wealth fund, holds the second-largest stake in Virgin Orbit, at 18%.
The company hired bankruptcy firms to draw up contingency plans in the event it is unable to find a buyer or investor. Branson has first priority over Virgin Orbit’s assets, as the company raised $60 million in debt from the investment arm of Virgin Group.
On the same day that Hart told employees that Virgin Orbit was pausing operations, its board of directors approved a “golden parachute” severance plan for top executives, in case they are terminated “following a change in control” of the company.
Business News
Historic UAW election picks reform leader who vows more aggressive approach to auto negotiations


Supporters wave signs during an address at the Time Warner Cable Arena in Charlotte, North Carolina, on September 5, 2012 on the second day of the Democratic National Convention (DNC).
Mladin Antonov | AFP | Getty Images
DETROIT – United Auto Workers members have ousted their president in the union’s first direct election, ushering in a new era for the prominent organized labor group ahead of negotiations later this year with the Detroit automakers.
The union’s new leader will be Shawn Fain, a member of the “UAW Members United” reform group and local leader for a Stellantis parts plant in Indiana. He came out ahead in a runoff election by hundreds of votes over incumbent Ray Curry, who was appointed president by union leaders in 2021.
Fain, in a statement Saturday, thanked UAW members who voted in the election. He also hailed the election results as a historic change in direction for the embattled union, which he says will take a “more aggressive approach” with its employers.
“This election was not just a race between two candidates, it was a referendum on the direction of the UAW. For too long, the UAW has been controlled by leadership with a top-down, company union philosophy who have been unwilling to confront management, and as a result, we’ve seen nothing but concessions, corruption, and plant closures,” Fain said.
Curry, who previously protested the narrow election results, said in a statement that Fain will be sworn in on Sunday and that Curry is “committed to ensuring that this transition is smooth and without disruptions.”
“I want to express my deep gratitude to all UAW staff, clerical support, leaders and most of all, our union’s active and retired members for the many years of support and solidarity. It has been the honor of my life to serve our great union,” Curry said.
More than 141,500 ballots were cast in the runoff election that also included two other board positions, a 33% increase from last year’s direct election in which neither of the presidential candidates received 50% or more of the votes.
The election was overseen by a federal monitor, who did not immediately confirm the results. The election results had been delayed several weeks due to a run-off election as well as the close final count.
Shawn Fain, candidate for UAW president, is in a run-off election with incumbent Ray Curry for the union’s highest-ranking position.
Jim West for UAW Members United
Fain’s election adds to the UAW’s largest upheaval in leadership in decades, as a majority of the union’ s International Executive Board will be made up of first-time directors who are not part of the “Administration Caucus” that has controlled the union for more than 70 years.
Fain and other members of his leadership slate ran on the promise of “No corruption. No concessions. No tiers.” The last being a reference to a tiered pay system implemented by the automakers during recent negotiations that members have asked to be removed.
The shuffle follows a yearslong federal investigation that uncovered systemic corruption involving bribery, embezzlement, and other crimes among the top ranks of the UAW.
Thirteen UAW officials were convicted as part of the probe, including two past presidents. As part of a settlement with the union in late 2020, a federal monitor was appointed to oversee the union and the organization held a direct election where each member has a vote, doing away with a weighted delegate process.
For investors, UAW negotiations with the Detroit automakers are typically a short-term headwind every four years that result in higher costs. But this year’s negotiations are anticipated to be among the most contentious and important in recent memory.
Fain has said the union will seek benefit gains for members, advocating for the return of a cost-of-living adjustment, or COLA, as well as raises and job security.
The change in the UAW comes against the backdrop of a broader organized labor movement across the country, a pro-union president and an industry in the transition to all-electric vehicles.
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