Needless to say, the past two days – which includes today – have been extremely troublesome. First and foremost, North Korea responded to Trump’s “fire and fury” warning by threatening to launch a missile at Guam, which caused the stocks to fall. Second, today is the 10-year anniversary of the start of the global financial crisis. And third, we can’t even look to the entertainment industry to distract us from these troubling times, as Hollywood looks about ready to start its own war.
If you’re interested in entertainment stocks, you probably know that Disney (NYSE:$DIS) and Netflix (NASDAQ:$NFLX) are in the limelight and are currently faced with a tremendous amount of pressure. Last night, in Disney’s earnings report, the Burbank, California-based company announced that it will no longer stream its films on Netflix.
However, as disappointing as this might be for Netflix, Michael J. Olson of Piper Jaffray said today that investors should stick with Netflix as it is very likely that the company will find a way to use the amount of money spent on Disney – rumored to be around $200 million annually – to create more content.
“While this will be a negative headline for Netflix, we expect the actual impact on the subscriber base to be minimal,” said Olson, who has a $215 price target and overweight rating on the stock.
It’s not just Olson who believes that Netflix will win this Hollywood battle either. There are other analysts who echoed his thoughts such as Andy Hargreaves of KeyBanc Capital Markets.
And so far these analysts seem to be right. On Wednesday, Disney shares dropped 5% to its lowest mark in eight months as investors were doubtful that it would be able to survive without Netflix.
Featured Image: twitter
