Posted on 05/10/2024 10:05:10 AM PDT by SeekAndFind
As Paramount comes off a rocky week in which the company lost its CEO and its exclusive merger talks window with Skydance came to an end without a deal, Berkshire Hathaway CEO Warren Buffett says his company has now sold its entire stake in Paramount. Berkshire Hathaway had previously sold a third of its stock in Paramount during the fourth quarter of last year.
"We sold it all, and we lost quite a bit of money, that happens in this business too," Buffett said on Saturday at Berkshire Hathaway's annual meeting in Omaha, Nebraska. He added that he was "100% responsible" for the Paramount decision -- both buying in and getting out.
According to the company's latest available filings, Berkshire owned 63.3 million shares of Paramount Global at the end of 2023. The company disclosed a $2.6 billion stake in Paramount in 2022 and picked up even more shares after that, but now they're out. "Owning Paramount made me think even deeper, but I certainly looked harder about the whole question of what people do with their leisure time and what the governing principles are of running an entertainment business of any sort, whether it's sports or movies or whatever it might be," Buffett said at the meeting. "I think I'm smarter now than I was a couple years ago, but I also think I'm poorer because I acquired the knowledge in the matter I did."
On Friday, after a month of exclusive talks between Paramount and Skydance, their negotiation window expired without a deal, signaling one is unlikely to happen. David Ellison's Skydance submitted a revised offer earlier this week in an effort to assuage concerns that the deal benefits non-executive chairwoman Shari Redstone over other investors.
(Excerpt) Read more at msn.com ...
SOURCE: https://dailytradealert.com/2024/05/09/2-stocks-warren-buffett-just-confessed-to-selling/
[EXCERPT]
Buffett also silenced ongoing rumors about the losses Berkshire absorbed from its stake in Paramount Global by absolving top investment aides, Todd Combs and Ted Weschler and noting that “I was 100% responsible for the Paramount decision.”
The thumping Buffett took on his investment in Paramount can be traced to a couple of challenges. To start with, it’s been tough sledding for certain types of advertisers over the past year and change. Specifically, legacy TV networks have seen ad dollars shift to streaming platforms. Between ongoing cord-cutting and select money-based indicators forecasting a recession, advertising revenue for its legacy networks has declined.
The other issue for Paramount Global has been its need to build out its streaming assets and content library to counter cord-cutting. Although revenue for its direct-to-consumer (DTC) segment surged 37% last year to $6.74 billion, the DTC segment is still losing a boatload of money. While increasing monthly subscription prices is part of the recipe to shrink these losses, Paramount’s streaming segment is an undeniable drag on the company’s bottom line.
Given these challenges, Paramount Global’s future might entail it being acquired. Private equity company Apollo Global and Sony Pictures have sent a letter to Paramount’s board where they’ve expressed interest in paying $26 billion, including debt, to acquire the company. Paramount has also had discussions about a potential merger with Skydance Media.
Buffet: “I never invest in anything I don’t understand”
I guess Paramount+ was an exception.
Thas is not what I understood.
Last year he was saying something to the effect of ‘streaming is a tough business’ and it would get worse.
Paramount owns CBS and MTV. They would have to be sold off-at a loss-if Sony took control of the company.
Well hollyweird is dead to me and I’m indifferent to it’s success or failure but it’s interesting I’m not alone in my stand.
Usually the parasite makes money off of failing businesses.
It’s almost like nobody wants to watch weak woke re-makes in a hyper-inflation environment. It’s a real head scratcher.
Well the CBS morning and evening news products are the WORST. NorDUH O'donnell is always pushing feminism and Gayle King is always pushing Black stories only.
History repeats itself. One hundred years ago Paramount was nearly bankrupt and it would sell out to the gangster-ridden Balaban family.
Buffett will be alright even after “losing quite a bit of money” on Paramount.
It shows even the best end up making poor investments once in awhile.
I guess he’s not really that smart after all
In 1940, Paramount agreed to a government-instituted consent decree and it was to immediately end traditional block booking and “pre-selling”, or collecting ‘up-front’ money for films not yet in production. The decision affected all studios. Paramount cut back on production, from 71 films annually to a singularly reduced 19 in the war years. Nevertheless the studios with their integrated studio-theatre combines reportedly were more profitable than ever. However, that combo lasted only until 1948 when they were ordered dissolved by a Supreme Court decision. It was generally agreed that the Court’s judgment wrote finis to the near century-old Movie studio system. And Paramount was never the same.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.