Longtime Netflix bull Josh Brown said on CNBC Friday afternoon that he has cut his position in the streaming platform by 85% following a $72 billion deal to buy part of Warner Bros. Discovery. The deal, announced Friday, will see Netflix acquire Warner Bros. WBD $27.75 per share movie studio and streaming service. Brown said he still likes the stock, but the fact that this deal could take up to a year to resolve means a big opportunity cost in terms of the loss of other investments. “We can’t sit around for a year and watch this become a political football and a capital partnership,” the CEO of Ritholtz Wealth Management told CNBC’s “Halftime Report” Friday afternoon. “This is just a portfolio management decision. While this Netflix is working its way through the meat grinder in Washington, I think there are other opportunities for upside in the near term.” Brown pointed to regulatory and antitrust scrutiny as headwinds to the deal, calling it the largest M&A deal in the post-pandemic world. “I can’t say that the Eye of Sauron won’t look at this event and say, ‘What does this mean for us?'” he added. Although Netflix “still represents tremendous value,” its growth and capital spending could face a short-term slowdown as the company’s capital is tied up in this potential deal. Mr. Brown said he would monitor the stock price closely over the next 12 to 18 months before deciding whether to take further action. “I think Netflix is a great value. I think it’s a great deal. In fact, I love this deal for them. I love not only them, but I love that they’re keeping this out of other people’s hands, which is equally important in the streaming wars,” he added. “But we can’t sit here, so we held a very small position and we’ll see what happens.” Netflix stock was trading 4% lower on Friday, while Warner Bros. Discovery stock was up nearly 5%. Disclosure: All opinions expressed by CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, its parent or affiliate companies, and may have been previously disseminated on television, radio, the Internet, or another medium. The above is subject to our Terms of Use and Privacy Policy. This content is provided for informational purposes only and does not constitute financial, investment, tax, or legal advice or a recommendation to purchase any securities or other financial assets. The content is general in nature and does not reflect your unique personal circumstances. The above may not be appropriate for your particular situation. Before making any financial decisions, you should strongly consider seeking the advice of your own financial or investment advisor. Investments involve risk. The analysis examples included in this article are examples only. The views and opinions expressed are those of the contributors and do not necessarily reflect the official policy or position of Ritholtz Wealth Management, LLC. Josh Brown is the Chief Executive Officer of Riholtz Wealth Management and may maintain securities positions in the securities discussed. The assumptions made within the analysis do not reflect the position of “RITHOLTZ WEALTH MANAGEMENT, LLC” to date or our disclosures. Click here for the full disclaimer.
