The FANG stocks have been some of the hottest stocks YTD. As some investors tell it, the FANGs are rising because they are winner take all businesses. There is and will be no viable competition.
In other words the investment thesis for the FANG stocks is “this time is different.”
Here, the WSJ explains that this time isn’t different. Disney is ending its deal with Netflix and starting a new streaming service of its own. CBS signaled earlier this week that it wasn’t going to sign global licensing agreements with Netflix in the future either.
Walt Disney Co. just became the biggest cord-cutter Hollywood has ever seen.
The world’s largest entertainment company said Tuesday it is starting two online subscription streaming services to offer its sports, movies and television programming directly to consumers, a broadside at distributors old and new, including cable providers and Netflix Inc.
As part of the strategy, Disney said it would pull future movies from Netflix, an announcement that sent shares for the streaming service down 7% in after-hours trading.
Netflix isn’t the only FANG under assault. Amazon is also generating some angst in the marketplace. Some manufacturers are now restricting sales on Amazon and many retailers are finally getting serious about e-commerce.
The FANGs continue to be an area of the market that is best left to traders, speculators, and those who believe, against all odds, that this time is different.
Jeremy Jones, CFA
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