CNBC’s Jim Cramer said Monday that he’s sticking by Disney after the company welcomed Bob Iger back to the chief executive role.
“Disney’s the defining story of the day. This is a good example of how you can stick with an iconic company … and make money when they bring in a better leader. And that’s exactly what I see happening as Iger takes the helm,” he said.
The company on Sunday announced Iger’s return as chief executive, effective immediately. The move reportedly came after senior leaders within the company complained that former CEO Bob Chapek was unfit for the job.
Shares of Disney closed up 6.3% on Monday.
Cramer called for Chapek’s firing earlier this month after the company reported wide misses on fourth-quarter earnings and revenue, driven partly by growing losses in its direct-to-consumer segment. He also criticized the former Disney head for not taking responsibility for his mistakes on the company’s post-earnings conference call.
“It was disgraceful, frankly,” he said.
And while he’s pleased with Iger’s return, Cramer reminded investors that there’s still work to do for the company to cut costs and prioritize profitability, particularly as it relates to the company’s streaming business.
“Iger set lofty goals for profitability for Disney+. It’s time to reset those goals to more realistic levels,” he said, adding: “Iger needs to say that profitability is what really matters here, not subscriber growth.”
Disclaimer: Cramer’s Charitable Trust owns shares of Disney.