In October 2020, investor Dan Loeb of Third Point sent a letter to Bob Chapek, the CEO of The Walt Disney Company. In the letter, Loeb wrote the following (bold added for emphasis):

"We understand that a more aggressive investment strategy may pressure short-term earnings on the path to creating long-term value. Lest there be reservation about making such a trade off and any potential shareholder concerns, we highlight an observation from Warren Buffett: “companies get the shareholders they deserve.” Disney deserves growth-minded, long-term oriented investors, and we believe that a strategy centered around using Disney’s many resources to drive growth in the DTC business will further attract them..."

While Loeb implored $DIS management to seek out the "long-term oriented investors" they deserved, his actions should make one question whether he belongs in that group. As disclosed in subsequent filings, Loeb went on to sell his Disney stake; 18 months after that letter was sent, Third Point didn't own a single share in The Walt Disney Company.

This is relevant because Loeb has once again decided to invest in Disney, and he's once again pushing for strategic / financial changes that would meaningfully impact the long-term value and strategic direction of the business. Personally, as someone who has owned shares of The Walt Disney Company for many years (and with the expectation that this will not change for many years to come), I think management should engage with Loeb accordingly.

His ideas may be valid and worth considering; management should live up to the fiduciary responsibility that it has to the long-term owners of the business. That said, management should also ask themselves whether the requests of an activist investor (trader) are truly aligned with the objectives of its owners and the long-term interests of the business.

Personally, if Loeb truly believes that his proposed solutions (like spinning ESPN) are additive to the overall value of the enterprise, I think he should put his money where his mouth is.

It would greatly increase my willingness to trust Loeb if he publicly committed to maintaining his current position in the company for a meaningful amount of time (say 3-5 years), especially if his ideas are adopted. (For what it's worth, and since he likes quoting Buffett, Loeb should consider the approach Buffett took at Cap Cities, as discussed in the 1985 shareholder letter).

For management, I think the solution here is to keep focused on the task at hand. The strategy is working, and Disney is positioned to have a much more profitable business with a wider moat over time. The focus shouldn't be on pursuing actions that might provide a small pop to the benefit of short-term traders; instead, the goal should be to make decisions that will lead the company to be worth multiples of its current market cap in the decades ahead.