MorningWord 4/5/16: The Iger Stand In

by Dan April 5, 2016 9:30 am • Commentary

After the close last night, Disney (DIS) announced that COO Thomas Staggs, long thought to be the successor for current CEO Bob Iger, has left the company after 26 years.  Shares of DIS are down nearly 2% in the pre-market as investors weigh the uncertainty of a succession plan for Iger, a man who transformed DIS, and is widely thought to be one of the most valuable CEO’s of the last decade.  As for outside candidates, there have already been no shortage of traditional media names thrown around, but I suspect there are few candidates that will garner the level of attention as Sheryl Sandberg, the current COO of Facebook (FB) and DIS board member.

Sandberg joined FB in 2008, after seven years at Google where she was last head of online sales and operations. Prior to that she spent five years at the U.S. Treasury, Mckinsey Consulting, Harvard Business etc etc etc. You know the drill, a stone cold player.  And that is just the pedigree, Ms. Sandberg has often been considered the adult in the room, juxtaposed to founder Mark Zuckerberg rocking his hoodie and jeans and boyish looks.

Since Facebook’s post ipo lows in 2012, the stock has risen 550% and sales  have grown from $5 billion in 2012, to $18 billion last year and an expected 43% growth this year to $25 billion. Truly stunning stock performance and revenue growth, and while I’d love to say right place right time, there is more to it, the company has disregarded critics, pushed forward with their vision of the social web and made investments in non-core businesses that the at the time seemed expensive. For now they are hitting on all cylinders, and I couldn’t think of a better time for Sandberg to hand over the reins. What the heck more could she do at this point? I had some thoughts on FB stock last week in this space (MorningWord 3/31/16: An About Facebook?).

I’ll leave you with this, FB shares are worth double, DOUBLE that of DIS ($320 billion market capitalization vs $160 billion). DIS is expected to book $56 billion in sales in 2016, an all time high, which is more than FB has booked cumulatively since its inception.

DIS is down in the pre-market given the uncertainty. But I can assure you that if Sandberg were to emerge as a top candidate to succeed Iger, the stock would certainly catch a bid. Keep an eye on the rumors.