South Carolina State Treasurer Curtis Loftis has removed the Walt Disney Co. (NYSE: DIS) from the list of approved holdings for the state’s investment portfolios. Loftis, who manages about $70 billion of assets for the state, cited Disney’s alleged abandonment of fiduciary responsibilities in a statement released earlier this month.
The decision stems from Disney’s involvement in a contentious debate with Governor DeSantis over a Florida law restricting discussions on sexual orientation in schools. Loftis accused Disney of aligning with far-left activists in boycotting lawful corporations for political gain.
“Disney has abandoned its fiduciary responsibilities to its investors and customers by joining far-left activists in boycotting legal, taxpaying, employment-creating corporations to further Disney’s political agenda,” his office said in the statement.
The South Carolina state treasurer’s office clarified that the $105 million in Disney debt instruments currently held will mature as scheduled and will not be replenished. Loftis emphasized his intention to scrutinize the equity portfolio in the coming weeks.
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Despite Loftis’ divestment, he said in an interview with Fox Business that the move is “not going to cause Disney any real harm,” adding that he “just want other people to see that you can stand up to these people and you live to invest another day. There are plenty of good investments out there that aren’t as risky as Disney.”
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Disney, in its 2022 annual report, acknowledged uncertainties in achieving Environmental, Social, and Governance (ESG) goals, recognizing potential impacts on its bottom line. But despite these challenges, Wall Street analysts, including JPMorgan’s Philip Cusick and Bank of America’s Jessica Reif Ehrlich, maintain positive outlooks on Disney stock, with price targets suggesting substantial upside potential.
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