When a CEO abruptly quits a company, the stock’s immediate drop is justified. The company may have a transition plan in place already. But replacing raw talented leadership is almost impossible.
Disney’s (NYSE:DIS) Bob Iger exited his CEO role to become executive chairman. This will allow the company to still benefit from Iger’s leadership in a less direct way. Still, Disney may still sustain growth from its content division if Iger is closely involved.
Its other assets, including the Fox media assets, the Disney theme parks, and the direct-to-consumer business will require strong leadership from the new CEO.
DIS stock closed at below $118 and lost 15% of its value. Investors need not dump the stock but may instead buy the dip soon.
Mastercard’s (NYSE:MA) CEO, Ajay Banga, will become an executive chairman on Jan. 1, 2021. This news came ahead of the company warning that that coronavirus will have a negative impact on results.
It now sees revenue growing 9-10% in the first quarter. But lower traveling volume and less cross-border e-commerce transactions will hurt results.
Mastercard’s long time uptrend is broken. The stock is expensive even after the drop. Until the economy rebounds, led by locked down cities ending the shutdown, avoid MA stock for now.
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