Michael Burry says there's a glaring difference between two of the world's most powerful media companies.
"Disney produces wine. Netflix produces milk," the investor of "The Big Short" fame said in a Substack post on Friday.
"One lasts and even gets better with time, one is just fine for now, but most certainly does not get better with age," he added.
Burry, who pivoted from running a hedge fund to writing about his personal investments late last year, was making the case that Disney-owned properties such as "Star Wars," "The Avengers," "Toy Story," and "Moana" have more staying power than Netflix series such as "Stranger Things," "Squid Game," and "KPop Demon Hunters."
He's often applied the "evergreen test" to Netflix, he said, to probe whether it makes TV shows and movies that are "long-lasting, watchable on repeat, across generations."
"Disney, Pixar, these produce evergreen content," he wrote. "Even Warner Brothers with Harry Potter and a few others."
Burry wrote that the viral success of "Suits" on Netflix a few years ago benefited the show's creator more than its host. "Netflix's other content has not struck me as evergreen," he added.
Disney is known for creating popular intellectual property such as "Frozen" then monetizing it across its sprawling empire of movies, TV shows, theme parks, resorts, cruises, retail stores, video games, and more.
Netflix's core offering is its streaming platform, which offers both original and licensed content.
Burry, most famous for his monster bet against the mid-2000s housing bubble, said he views Netflix as "another player in a much more distributed and competitive streaming field."
The bargain hunter said Netflix stock didn't strike him as an obvious deal even after slumping from over $130 last summer. It closed at $69 on Friday, down nearly 50% from its peak.
Netflix stock has been hit by slowing revenue and subscriber growth, as fierce competition has made it harder to attract and retain customers and preserve its margins.
"The competition came for Netflix," Burry tweeted in April 2022, after the company's subscriber base shrank for the first time in more than a decade.
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Theron Mohamed is a London-based correspondent on the Trending team at Business Insider. His coverage spans finance, investing, wealth, markets, and the economy.Theron joined BI in 2019 as a reporter at Markets Insider and rose to the rank of correspondent before moving to the Trending team in 2024. He previously covered tech, media, and telecom stocks for Investors Chronicle magazine and had a brief stint on the Financial Times' Data team. He interned at the Wall Street Journal in New York where he primarily wrote for Heard on the Street.Theron has freelanced for The Independent, The Telegraph, WIRED, and several smaller publications. He holds an undergraduate degree in geography from the London School of Economics, and a master's degree in journalism from Columbia University.Theron often covers Warren Buffett, Michael Burry, Jeremy Grantham and other top-flight investors. He also writes about the world's wealthiest people and shares financial advice from all manner of rich and successful people.Email Theron at [email protected] and follow him on X @theron_mohamed.Expertise
- Corporate finance
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