Disney just reported a solid quarter and the stock tanked 7%. That should tell you everything you need to know about what investors actually care about.

The numbers were fine. Revenue hit $26 billion, up 5% year-over-year. Net income came in at $2.48 billion, beating Wall Street estimates. Theme parks crushed it with over $10 billion in quarterly revenue for the first time ever. Streaming finally turned a meaningful profit, with operating income up 72%. The company is planning $7 billion in stock buybacks. By any normal metric, this was a good quarter.

So why did the stock drop? Because Bob Iger is leaving, and investors don't trust the guy taking over.

Josh D'Amaro, the current head of Disney's theme parks division, will become CEO on March 18th. Iger will stick around as a senior advisor until the end of the year, but make no mistake—this is a handoff. And Wall Street is not impressed.

Here's the problem. D'Amaro is a theme parks guy. That's great if you're running Disneyland, but Disney is a lot more than roller coasters. The company's future depends on streaming, content, and navigating a media landscape that's in the middle of a once-in-a-generation disruption. D'Amaro has zero track record managing those businesses at scale.

Compare this to other recent CEO transitions. When Tim Cook took over Apple, he'd been running operations for years and understood every part of the business. When Satya Nadella got the Microsoft job, he'd already proven he could lead the cloud business. D'Amaro? He ran the parks. Well. But that's not the same thing as running a $200 billion media conglomerate.

Investors are also wondering whether this succession plan was actually Iger's first choice, or whether it's Plan B after other candidates fell through. Disney's last CEO transition was a disaster—Bob Chapek lasted less than three years before getting fired and Iger coming back. The market doesn't want a repeat.

The bull case for D'Amaro is that he understands the Disney brand better than anyone. Theme parks aren't just about operations—they're about experience, storytelling, and keeping the magic alive while extracting maximum revenue per guest. If anyone can translate that to streaming and content, it's someone who's already done it in the physical world.

The bear case is that the media business is nothing like theme parks. Streaming is about technology, data, and competing with Silicon Valley giants who move faster and spend more. Content is about managing talent, making big bets, and navigating cultural landmines. Parks are a controlled environment. Media is chaos. And there's no evidence D'Amaro can handle chaos.

From an investor perspective, the question is simple: do you trust Disney's board to have picked the right person, or do you think they settled because Iger waited too long to hand over the keys?

Here's what I'd watch. If Disney announces a strong number two—someone with media or tech chops to balance D'Amaro's operational expertise—that would ease concerns. If the executive team starts looking shaky, or if key talent leaves, that's a red flag.

Disney's fundamentals are solid. The parks are printing money. Streaming is finally profitable. The content pipeline is stacked. But none of that matters if leadership can't execute. And right now, the market is pricing in a leadership risk premium.

This might be a buying opportunity if you think D'Amaro can grow into the role. But if you're expecting a smooth transition, you haven't been paying attention to Disney's succession track record.