BOSTON (REUTERS) – Hedge fund Third Point on Monday (Aug 15) disclosed a stake of roughly US$1 billion ($1.38 billion) in Walt Disney and said it planned to push the media company to make a string of changes, from spinning off cable sports channel ESPN to buying back shares and adding new board members.

Billionaire investor Daniel Loeb, who runs Third Point, made a U-turn on Disney when he built a new stake in the second quarter, not long after exiting his position months earlier when fears about rising prices and faster interest rate hikes sparked a sharp market sell-off.

Now, Third Point, owning roughly 0.4 per cent of the company known for its theme parks and movies like Aladdin and Frozen, is back with praise for Disney chief executive Bob Chapek and a list of initiatives he and the board should pursue to boost growth.

“Our confidence in Disney’s current trajectory is such that we have, in recent weeks, repurchased a significant stake in the company,” Mr Loeb wrote to Mr Chapek in a letter seen by Reuters.

Mr Loeb wrote after Disney said quarterly profit jumped 50 per cent and its streaming subscriptions overtook Netflix’s.

Mr Chapek has weathered criticism in Hollywood over a 2021 dispute with actress Scarlett Johansson, the star of Marvel film Black Widow, and a political storm over the company’s response to a new education law in Florida, where the company employs some 80,000 people.

Disney initially kept quiet about the measure, which limits classroom discussion of gender identity and sexual orientation, prompting criticism from that community and some employees. It later condemned the law, causing Florida Governor Ron DeSantis to rail against “Woke Disney”.

Mr Loeb wrote that Disney’s management may already be considering the changes he proposed, including cost cuts, paying down debt and buying back shares. He said Disney’s board needs to be refreshed, finding “gaps in talent and experience as a group that must be addressed”.

Mr Loeb said he has identified potential directors but declined to elaborate.

Disney said in a statement that it welcomes “the views of all our investors”. It noted the company’s revenue and profit growth under Mr Chapek’s leadership, adding that its board “has significant expertise in branded, consumer-facing and technology businesses”.

Activist investors often push their agendas by trying to win board seats either through an invitation from the company or by rallying other investors to back the directors in a vote.