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Warren Buffett, CEO of Berkshire Hathaway, has sold a third of his shares in Paramount. JOHANNES EISELE—AFP via Getty Images
Big short Investor Michael Burry seems to like what he hears from the streaming giants, while legendary investor Warren Buffett isn’t convinced. At least, that is if his stock presentations are anything to go by.
On Wednesday, Burry’s Scion Asset Management revealed in a SEC Filing which had added 375,000 shares of Warner Brothers Discovery to its portfolio during the last quarter of 2023.
Burry, best known for describing the 2008 housing crisis, got his foot in the door long before the media giant. Announced an unprecedented coalition with two other streaming giants: ESPN and Fox.
The trio confirmed earlier this month that they would launch a new sports streaming service in the fall of 2024, which will include content from major professional sports leagues and college sports.
However, the news, unfortunately for Burry, has done little to boost the company’s share price. He market price for CNN’s parent company it is down 36.6% over the past year and 16.5% so far this year.
A hint as to why Burry is interested in Warner Bros. may have been dropped during the company’s third-quarter 2023 earnings call. The company posted a minimal revenue increase of just 1% to $9.9 billion, with advertising revenue also down by up to 50% in some areas of the business.
But update He also highlighted renewed consumer interest as well as investment in new products. The company published its highest-grossing film in history with Barbie grossing almost $1.5 billion at the global box office.
Additionally, as other film franchises have begun to lose steam, Warner Bros. said. The Nun II (the sixth film in The spell universe) surpassed $250 million at the global box office, making the series the highest-grossing horror genre series of all time.
Additionally, Warner Bros Discovery CEO David Zaslav said newly launched products, such as the news streaming service CNN Max, were showing early signs of higher engagement and lower churn.
Primary problems
At the other end of the spectrum, Warren Buffett’s Berkshire Hathaway confirmed this week that it was reducing its holdings in Paramount Global.
Information from the Oracle of Omaha showed the sale of 30.4 million shares, about a third of its previous holding, but it doubled its bet on oil company Chevron.
The news that Berkshire is walking away from the multinational media business appeared to spook other investors, and its share price fell 6.7% to $12.31 following the announcement.
Paramount has not enjoyed the best time on the NASDAQ over the past 12 months. At the time of writing this article, the company Share price has fallen more than 46% since this time last year, and is down 8.4% so far this year.
The company also faces turbulent times. The majority of voting shares in Paramount are held by the Redstone family, headed by Shari Redstone, which is currently courting a number of investors who are weighing offers to buy Paramount’s parent company, National Amusements.
Bloomberg Reports that among the options for the Redstones may be Apollo Global Management, one of the largest money management companies in the world and an investor in the independent film studio Legendary Entertainment.
Separately, film and television producer David Ellison is weighing an offer that would merge National Amusements with his company Skydance Media, the Wall Street Journal reports.
It remains to be seen if any of the offers are made and accepted, but Paramount’s current top management is already having to make some tough decisions. Citing sources, Reuters reported On Tuesday, the company will hire 800 people, although the company declined to comment.
The company is also considering a Disney-Fox-ESPN type deal with Apple, the Wall Street Journal reports, which would see Apple TV and Paramount plus, which has so far struggled to make a profit, join forces.
Despite the turmoil, Buffett, like Burry, clearly sees green shoots for storied media companies trying to navigate a new era of streaming; After all, he still owns tens of millions of shares. His faith may be justified: CBS, one of Paramount’s many offerings, drew a record 123.7 million American viewers for the Super Bowl on Sunday, according to Nielsen Estimates.
The record number makes the Kansas City Chiefs’ defeat of the San Francisco 49ers the most-watched event since astronauts walked on the Moon in 1969. Or, by other measures, ever.