Jim Cramer Raises Disney Stock Red Flag After Nelson Peltz's Board Seat Loss

CNBC host Jim Cramer says activist investor Nelson Peltz‘s recent defeat in his bid for a seat on the Walt Disney Co DIS board has raised concerns about the company’s stock.

What Happened: Cramer expressed his apprehension about Disney’s stock following Peltz’s failed attempt to secure two board seats at the company. The news of Peltz’s defeat was confirmed shortly after 1 p.m. ET on Wednesday, causing a $1.30 drop in Disney’s stock, reported CNBC.

“A Peltz loss is worrisome to me because I think the stock has moved up a great deal, too fast for me,” Cramer said. “We have sold some and I would like to sell more, but we are restricted.”

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Why It Matters: Despite the recent turbulence, Disney’s stock has been on an upward trajectory, with analysts predicting a 20% rise due to CEO Bob Iger‘s turnaround strategy. This victory against Peltz could be seen as a validation of Iger’s leadership, but Cramer’s concerns suggest that the market might not be fully convinced.

Despite the victory, Disney’s stock has been on a rollercoaster ride, with shares falling below $120 after the annual meeting. This comes after the company’s largest shareholder, Vanguard, threw its weight behind Disney’s management in the proxy fight against Peltz.

On the other hand, Tesla CEO Elon Musk had previously voiced his support for Peltz, suggesting that his presence on the board would “significantly improve” Disney’s share price.

Price Action: On April 3, Disney’s stock opened at $122.27 and closed at $118.98, marking a 3.6% decrease. The stock’s 52-week high and low are $123.74 and $78.73, according to the data from Benzinga Pro.

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