The Walt Disney Company (NYSE: DIS) announced late Sunday that it had reappointed Bob Iger as CEO effective immediately, after Iger’s hand-picked successor, Bob Chapek, came under fire for his handling of the entertainment giant.
“It is with an incredible sense of gratitude and humility — and, I must admit, a bit of amazement — that I write to you this evening with the news that I am returning to The Walt Disney Company as Chief Executive Officer,” Iger wrote to employees in an email, which was obtained by CNBC.
Following the announcement, the share price rallied 9% when the markets opened.
The sudden change comes 11 months after Iger’s departure from Disney, and just days after Chapek announced plans to decrease expenditures at the firm, which has been plagued by rising costs at its streaming service, Disney+.
“We thank Bob Chapek for his service to Disney over his long career, including navigating the company through the unprecedented challenges of the pandemic,” said Susan Arnold, Disney’s board chair.
Earnings for the corporation fell far short of Wall Street’s forecasts earlier this month. Even its theme park division, which posted a revenue increase, provided less than analysts expected.
In Q3 2022 financials reported this August highlighted a quarterly revenue of US$21.50 billion. This is an increase from Q2 2022’s US$19.25 billion and Q3 2021’s US$17.02 billion.
The company also saw its paid subscriber base across its streaming platforms, Disney +, ESPN +, and Hulu, increase to 221.1 million, topping for the first time Netflix’s plateauing 220.7 million users as of Q2 2022.
“We had an excellent quarter, with our world-class creative and business teams powering outstanding performance at our domestic theme parks, big increases in live-sports viewership, and significant subscriber growth at our streaming services,” said Chapek in a statement.
Chapek was chosen CEO in February 2020, succeeding Iger, who had already stated then that he would not return to the position. The now former chief is said to have resigned, according to the company.
Soon after Chapek took over in 2020, Covid-19 became a pandemic, forcing the closure of Disney’s theme parks and preventing the company from releasing movies in theaters for a while. Nonetheless, the company’s stock rose in 2021 before plummeting in recent months.
According to a memo obtained by CNBC earlier this month, Chapek, whose term as CEO was renewed earlier this year, planned a hiring freeze, cost reduction, and layoffs across the company. The internal memo was delivered three days following the company’s disappointing quarterly results report.
Disney last traded at US$97.31 on the NYSE.
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