It Is Shortsighted To Sell Disney Stock Now

Figure 1: CNBC's Jim Cramer, host of Mad Money. CNBC

For CNBC’s Jim Cramer, investors are buying high and selling low by focusing on Disney’s short-term woes rather than on the company’s long-term potential.

The market continues to witness softness in Disney stock (DIS) – Get Walt Disney Company Report. Investors seemed disappointed in last quarter’s results, particularly regarding the addition of Disney+ subscribers. On the day after the earnings report, share price fell 7%.

At the same time, other investors have remained optimistic about the company. One such example is CNBC’s Jim Cramer, host of Mad Money, who sees reasons to bet on DIS for the long term. Among them are (1) the company’s new content investments, (2) the reopening of the parks and (3) the contrarian view in the face of so much negative sentiment.

One key criticism of Disney’s streaming business model are the high costs. The DTC (direct-to-consumer) approach entails large expenses with the production of exclusive content, which is arguably key in attracting and retaining the platform’s subscribers.

But Cramer does not seem to view this as a problem, rather as a long-term investment that the market still misunderstands. Disney and peers like Netflix (NFLX) – Get Netflix, Inc.

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