After Walt Disney Co DIS CEO Bob Chapek swatted investor calls for an ESPN spinoff over the weekend and noted that plans are in place for the future of the sports network, one investor jumped in and bought shares of the media giant.
What Happened: Virtus Investment Partners' Joe Terranova bought Disney stock this week following the company's annual D3 event in Anaheim, California.
"I certainly applauded what I heard from CEO Bob Chapek over the weekend, identifying another growth engine for the company beyond Disney+," Terranova said Wednesday on CNBC's "Fast Money Halftime Report."
During the D3 conference, Chapek told fans that Disney has been getting a lot of offers from parties interested in buying ESPN following rumors of a potential sale.
"If everyone wants to come in and buy it ... I think that says something about its potential," Chapek said.
The Disney CEO also noted that the company has plans in place to improve the growth trajectory of ESPN.
Why It Matters: Disney's ESPN business has been a hot topic for investors in recent weeks after activist investor Dan Loeb wrote to Chapek with suggestions for unlocking further value, which included an ESPN spinoff. However, Loeb took a step back on his vision for ESPN after engaging in regular conversations with Chapek.
"We have a better understanding of @espn's potential as a standalone business and another vertical for $DIS to reach a global audience to generate ad and subscriber revenues," Loeb said via tweet on Sunday.
Terranova sees Chapek's unwillingness to sell ESPN as a reason to begin building a position in Disney.
Related Link: Looking At Walt Disney's Recent Whale Trades
"That's the vehicle in which the growth opportunity may come [and] it might come in the form of sports betting," he said.
According to a Bloomberg report, an ESPN sports-betting app is already in the works.
"Sports betting is a part of what our younger, say, under-35 sports audience is telling us they want as part of their sports lifestyle," Chapek reportedly said in an interview at Disney’s D23 event.
When asked if Disney was developing an ESPN sports-betting app, Chapek responded: “We’re working very hard on that.”
Terranova told CNBC that he's excited about the future of Disney "for the very first time."
DIS Price Action: Disney has a 52-week high of $160.32 and a 52-week low of $90.23.
The stock was up 0.62% at $112.46 Wednesday afternoon.
Photo: Katie Rose from Pixabay.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
