Bob Iger is returning to Walt Disney Co (DIS.N) as chief executive less than a year after he retired, a surprise comeback that coincides with the entertainment company’s attempt to boost investor confidence and profits at its streaming media unit.
Iger, 71, who was chief executive for 15 years and retired as chairman last year, has agreed to serve as CEO for two more years effective immediately, Disney said in a statement late on Sunday. He will replace Bob Chapek, who took over as Disney CEO in February 2020 just as the COVID-19 pandemic hit, leading to park closures and restrictions on visitors globally.
Disney shares surged more than 9% in premarket U.S. trading, valuing the company at about $182 billion. The Frankfurt-listed stock jumped as much as 10% in European trading on Monday, set for its best day in almost two years.
“Maybe the old hand on the tiller is what’s required,” said Markets.com analyst Neil Wilson as the company spends billions of dollars to compete with rival Netflix (NFLX.O) and seeks to revive its share price.
The stock has sunk more than 40% so far this year, lagging the nearly 7% year-to-date drop in the broader Dow Jones Industrial Average (.DJI). It lost almost a third of its value while Chapek was at the helm.
“The Board has concluded that as Disney embarks on an increasingly complex period of industry transformation, Bob Iger is uniquely situated to lead the Company through this pivotal period,” Chairwoman Susan Arnold said in the statement.
Disney disappointed investors this month with an earnings report that showed mounting losses at its streaming media unit that includes Disney+. Shares hit a 20-year low the day after the fourth-quarter earnings.
The streaming business lost nearly $1.5 billion in the quarter, more than twice the previous year’s loss, overshadowing subscriber gains. The unit, which competes with Netflix Inc (NFLX.O) among others, has yet to turn a profit since its 2019 launch. Disney has said it expects Disney+ to become profitable in fiscal 2024.
“I am an optimist, and if I learned one thing from my years at Disney, it is that even in the face of uncertainty – perhaps especially in the face of uncertainty – our employees and Cast Members achieve the impossible,” Iger said in a memo to employees seen by Reuters.