1. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders: 76
Cramer discussed The Walt Disney Company’s (NYSE:DIS) merger of Fubo TV and Hulu + Live TV which was announced earlier in the year.
“On Monday morning, Disney announced it’ll be combining its Hulu+ Live TV business with Fubo, and that’s a small media company, but it offers a streaming service that’s focused primarily on live sports content. Disney effectively is acquiring Fubo. Through this deal, I gotta tell you, they’ll have a 70% stake in the combined entity, small, but could be important. They’re snapping this thing up just to stave off some litigation from Fubo, which is trying to block a streaming joint venture between Disney, Fox, and Warner Brothers Discovery.”
Cramer remarked that following Disney’s strong announcement after the market close, the company revealed it has around 157 million global users streaming content with ads. Cramer mentioned that they had discussed increasing their position in the Trust based on these numbers, which he found quite impressive. While he noted that he was unable to make any moves at that moment, he expressed his enthusiasm about what he was seeing.
“Looking at the transactions we’ve seen just this week, while some of them likely would’ve been challenged by Biden’s ideologically driven regulators, most of them seem pretty justifiable. All of them make great business sense. Disney tying up with Hulu and Live TV with Fubo, that clears the way for a streaming venture with Fox and Warner Brothers. I’m not sure that project will work, but now they can at least try it.”
Disney (NYSE:DIS), a powerhouse in the global entertainment industry, continues to expand its reach across various sectors, with a notable emphasis on its streaming operations. In early January, it made headlines with its announcement to acquire 70% of Fubo, a video service that had previously filed a lawsuit aimed at blocking Disney’s plan to launch Venu, a sports streaming venture in partnership with FOX and Warner Bros. Discovery.
The acquisition also resolves the ongoing litigation surrounding the Venu Sports platform. Instead of proceeding with the legal dispute, Fubo will merge with Disney’s Hulu + Live TV service. As reported by CNBC, Fubo shareholders will retain 30% of the company following the merger. The deal is expected to close within 12 to 18 months.
Fubo CEO David Gandler discussed the company’s acquisition of Hulu+ Live TV, calling it a stewardship of an iconic brand. Gandler acknowledged that having two separate platforms is not ideal but emphasized the potential backend synergies. While Fubo has focused on sports and news, Hulu+ Live TV brings strong entertainment content.
Disney’s (NYSE:DIS) Hulu+ Live TV and Fubo both offer services similar to a traditional cable TV bundle, featuring a range of linear TV networks. Together, the two platforms boast a combined subscriber base of 6.2 million. It’s important to note that the deal does not include Hulu’s original streaming platform.
While we acknowledge the potential of The Walt Disney Company (NYSE:DIS) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than DIS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure. None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and investors. Please subscribe to our daily free newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
