Walt Disney Stock Pops on Higher Nelson Peltz Stake

Trian Fund Management is now Walt Disney’s biggest investor

The shares of Walt Disney Co (NYSE:DIS) are up 1% at $83.79 at last check, following news that Trian Fund Management, which is owned by activist investor Nelson Peltz, increased its stake in the entertainment name to $2.5 billion. The fund manager is now Walt Disney’s largest investor, and may seek several board seats. Plus, Trian said DIS is undervalued at the moment. 

The equity is rebounding off an Oct. 4, nine-year low of $78.74, but continues to struggle with overhead pressure from its 60-day moving average. The $86 level is also acting as resistance, and over the past 12 months Walt Disney stock has shed more than 13%.

While calls still outpace puts in the options pits, the latter have been growing in popularity. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), DIS carries a 50-day put/call volume ratio that ranks in the 81st percentile of annual readings.

For those looking to make a bet on the equity, options are affordable right now. The shares’ Schaeffer’s Volatility Index (SVI) of 26% sits higher than just 13% of all other readings from the past year, suggesting near-term option contracts are attractively priced at the moment, from a historical volatility standpoint.

 

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