NEW YORK CITY, New York: The American hedge fund Third Point has purchased a stake worth some $1 billion in Walt Disney, adding that it plans to urge the media company to make a number of changes, including selling cable sports channel ESPN, buying back shares and adding new board members.

Not long after exiting Disney, when fears about rising prices and faster interest rate hikes caused a sharp market selloff, Third Point's head, billionaire investor Daniel Loeb, made a U-turn when he built a new stake in Disney in the second quarter.

Third Point now owns some 0.4 percent of the media company known for its theme parks and movies, and has praised the company's CEO, Robert Chapek, and a list of initiatives aimed at boosting growth.

In a letter seen by Reuters, written after Disney said quarterly profits jumped 50 percent and its streaming subscriptions overtook Netflix, Loeb told Chapek, "Our confidence in Disney's current trajectory is such that we have, in recent weeks, repurchased a significant stake in the Company."

Chapek has faced criticism in Hollywood over a 2021 dispute with the star of Marvel film "Black Widow," Scarlett Johansson, as well as for a political storm over the company's response to a new education law on gender identity and sexual orientation in Florida, where the company employs some 80,000 people, which caused Florida Governor Ron DeSantis to rail against "Woke Disney."

In his letter, Loeb said the company's management may already be considering the changes he proposed, including cost cuts, paying down debt and buying back shares, adding that Disney's board needs to be refreshed, and finding "gaps in talent and experience as a group that must be addressed."

In a statement, Disney said it welcomes "the views of all our investors."

After the announcement, Disney's stock, which has declined by some 21 percent since January, was up 2.2 percent at $124.21.

Like other prominent hedge fund managers, Loeb has weathered double-digit losses this year and sold nearly all technology names earlier in the year to limit the damage, sources said.