Shares of the media and entertainment giant fell 6.94% to hit a fresh 52-week low during the session. However, the “Bad Money” Host said he won’t shy away from the stock because its sharp decline seemed linked to it Netflix‘s prognosis of Subscriber growth slowdown.
Netflix’s outlook — offered Thursday night when the company reported its earnings — spooked investors, and the company’s shares plunged 21.8% on Friday.
“I want to own the stocks of longtime, great Americans who have fallen into a guilt fiasco, and that’s exactly what happened to Disney stock today,” Cramer said, while noting that he was prevented from adding to his shares Charitable Trust on Friday changed Disney’s position after mentioning the stock on morning TV. Cramer’s ethics policy is that he waits 72 hours before executing a trade in any stock that he discusses on CNBC’s television programs.
Cramer’s trust Bought back from Disney in September, about three months after leaving his position entirely for the first time in 16 years. Confidence was added to the stock end of November and then back in December.
Cramer admitted on Friday that he was “too early” at Disney, alluding to the fact that the stock is trading lower than when the trust made its purchases.
“But it’s time to mix speculative stories with investment-grade stories. A lot of the stocks wiped out here belong to companies that don’t have much in the way of earnings, companies that trade mostly on hype or hope,” Cramer said.
He said he sees a number of speculative assets — including cryptocurrencies and stocks that went public through a reverse merger with a special purpose vehicle — that deserve to fight now as Wall Street braces for likely Federal Reserve rate hikes .
“But you can’t just extrapolate the weakness of a company that’s done very well, Netflix, with a whole bunch of other big brand name companies that make amazing products and make good revenue, like Disney,” Cramer said.
“I’m not saying Netflix isn’t worth owning. At a certain price, it sure will,” he added. “What I’m saying is that there are a lot of quality companies that are in distress because of Netflix today, and these were the best ones to buy.”
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