Tag Archives: Warner Bros. Discovery

Why returning to Westeros, Middle-earth and ‘Star Wars’ felt so good in 2022

Editor’s Note: The past year was filled with uncertainty over politics, the economy and the ongoing pandemic. In the face of big changes, people found themselves longing for a different time. CNN’s series “The Past Is Now” examines how nostalgia manifested in our culture in 2022 — for better or for worse.



CNN
 — 

After a dreary pandemic winter, a summer surge and a deluge of distressing news in between, it felt good to have dragons on TV again.

“House of the Dragon,” a prequel to HBO’s über-hit “Game of Thrones,” didn’t attempt to reinvent its franchise. “Dragon” checked all the “Thrones” boxes: Bodily mutilation, violence against women, scenes filmed in near-darkness, wigs. (HBO and CNN share parent company Warner Bros. Discovery.)

And though dragons didn’t get nearly enough screen time, it was hard to complain when the CGI winged creatures soared and provided us a fantastical escape.

One week after HBO returned to Westeros, J.R.R. Tolkien fans were whisked back to Middle Earth, with all its Orcs and Elves and wizards, in “The Lord of the Rings: The Rings of Power” on Amazon Prime. That same month, Disney’s acclaimed “Star Wars” prequel-to-a-prequel, “Andor,” started streaming. “Interview with the Vampire” and “Wednesday” closed out a year that also saw the TV returns of Obi-Wan Kenobi and Spock.

If the 2020s are the era of “peak TV,” then 2022 was the year of peak IP TV (IP meaning intellectual property), particularly in the fantasy and sci-fi realms. Blockbuster productions such as “House of the Dragon” and “Rings of Power” largely stuck to the proven formula of their predecessors. There were disappointments, like two “Star Wars” miniseries that ostensibly reintroduced beloved characters but illuminated little about them, instead dimming much of the magic that makes the galaxy far, far away so consistently entertaining.

But there were welcome surprises, too, with “Andor” and “Interview with the Vampire,” both of which maintained the heart of their original stories but were decidedly fresher, incorporating more overt themes concerning race, sexuality and radicalism.

Series that transport us to fictional worlds we know well with characters we love are entertaining balms in times of uncertainty. Whether they can stand on their own is largely determined by fans old and new. But in spite of everything 2022 threw at us, it was also a year where we could escape into new tales of elves and vampires — and even those incestuous Targaryens and their magnificent dragons.

Part of the reason why so many reboots, prequels and spinoffs have been cropping up recently is because of the streaming boom, said Daniel Herbert, an associate professor at the University of Michigan who studies film and media. Working within a relatively new medium, companies “grow more conservative in programming” and turn to established titles and fanbases that have been hits in the past, he said.

From a business standpoint, building on existing powerhouses has proven successful this year: The “House of the Dragon” pilot was one of HBO’s most-watched in years, with nearly 10 million viewers, and its finale was HBO’s biggest since the 2019 end of the original “Thrones.” And while Netflix is more opaque with its numbers, the streamer has said that “Addams Family” spinoff “Wednesday” surpassed a viewership record previously set by its flagship smash “Stranger Things.”

But we, the audience, return to these familiar worlds time and again because they’re creative safe havens – we’ve been there before, and we’ve liked the time we’ve spent there. We expect to continue to enjoy the stories produced in these fictional realms.

“I think we overestimate our desire for originality,” Herbert said. “There is comfort in repetition … in having clear expectations and having those expectations fulfilled.”

Familiar IP has a buoying quality, a way to maintain consistency in an otherwise unstable world. We expect bloodshed on “House of the Dragon” and morbid one-liners on “Wednesday.” Both deliver, even if the storylines are new.

“Recycling characters and story worlds is one way of maintaining consistency,” Herbert said.

What’s more, franchise storytelling can be “psychologically useful,” especially during periods of stress and uncertainty, said Clay Routledge, a researcher and director of the Human Flourishing Lab at the Archbridge Institute, a policy think tank in Washington DC, where he studies nostalgia.

“When the world feels chaotic, or we are experiencing a lot of personal or societal distress, these shared stories help stabilize us,” Routledge said. “Our entertainment interests can help us take advantage of the psychological and motivational power of nostalgia,” which can make us feel “energized, optimistic and socially connected.”

That social connectedness is increasingly rare in the streaming age, but many of these blockbuster series renewed it: “House of the Dragon” was appointment viewing on Sunday nights at 9 p.m. ET. It felt as though its viewers were actually tuning in at once, together, and reacting live around the digital water cooler.

If you’re a hardcore “Star Wars” fan, you remember the awe of watching the Millennium Falcon jump into hyperspace for the first time or the horror and confusion of Jar-Jar Binks getting his tongue stuck in the engine of a pod racer. You want new additions to the “Star Wars” canon to replicate those moments of wonder and genuine surprise.

But prequels, reboots, spinoffs and the like have a tricky balance to strike — they’ve got to have enough of the same to remind viewers of why they loved the franchise in the first place and enough newness to pique the interest of a new generation of viewers.

“Naturally, we are drawn to IPs we have a nostalgic or sentimental connection to,” said Andrew Abeyta, a social psychologist and assistant professor at Rutgers University-Camden. “Because these IPs mean so much to us, it creates high and specific expectations. Nostalgia is a feeling, and part of the allure with nostalgic media is that they make us feel the same way we did when we first experienced them.”

Such great expectations can be stifling. “The Rings of Power,” reported to be the most expensive TV series ever made at an estimated $465 million for its first season alone, was perhaps too big to fail. Narrative risks were few, and critics of the series felt it was poorly paced, lacked tension and couldn’t escape the shadow of Peter Jackson’s beloved film trilogy.

But many viewers don’t want more of the same when it comes to new chapters in their favorite fictional universes, said Herbert.

“If we were truly nostalgic, we’d just rewatch the originals,” he said. “It’s about wanting more, wanting the past to catch up with us … wanting those characters to come up to date with our own present historical moment.”

“House of the Dragon” attempted some cultural commentary alongside its escapism with its depictions of traumatic childbirth (with mixed results). “Andor” was praised for finally making the galactic rebellion feel radical, focusing on a small contingent of political actors working to make real change often at great cost. Its protagonist becomes a real rebel over the course of Season 1, out of necessity as much as genuine belief in the cause (partly thanks to a manifesto bequeathed by a dead comrade).

And AMC is breeding new Anne Rice fans with its “Interview with the Vampire” adaptation. Set in both early-20th-century New Orleans and present-day Dubai, the series makes sexuality and race central themes, inextricably tied to the story of emotionally tortured vampires trying to be a family and the journalist trying to get the story.

But new adaptations of beloved properties can also provoke what Herbert called a “perverse nostalgia”: When franchises like “Lord of the Rings” and “Star Wars” cast people of color, some vocal fans reject their inclusion in those worlds based on adaptations that existed before an Afro-Latino actor played a heroic elf or a Black woman portrayed a conflicted assassin who worked closely with Darth Vader (whose own iconic voice has for decades been provided by a Black actor, James Earl Jones).

This past year was a standout for nostalgic storytelling based on existing IP – something many of us needed when reality provided little hope.

“People turn to IPs they have sentimental or nostalgic connection to during tough times for comfort,” Abeyta said. “Nostalgia is a quick and effective way of fending to temporarily fend off loneliness and stress.”

These series kept millions of us company during yet another trying year, attracting both old fans and new, aided by free publicity on TikTok (see the “Wednesday” dance phenomenon or the now-ubiquitous audio of “House of the Dragon” actor Emma D’arcy’s drink order).

Telling and retelling stories is a trend as old as stories are, and for nearly as long as we’ve been making movies and TV, we’ve been remaking them, Herbert said. As long we’re still dancing with Wednesday Addams, singing along with Poppy the Harfoot or watching dragons dispatch enemies with bated breath, TV will continue to churn out spinoffs, prequels and reboots of familiar franchises.

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Disney+ Price Increase Shows Limits of Subscriber-Growth Push

The growth-at-all-costs phase of the streaming wars is over; now, profits are the priority.

Faced with slowing subscriber growth in their core domestic markets, some streaming services are shifting their focus from adding users to increasing their bottom line. The result is that streamers such as

Walt Disney Co.

DIS 4.68%

,

Netflix Inc.

NFLX -0.58%

and

Warner Bros. Discovery Inc.

WBD 4.43%

are each doing some combination of reducing costs, raising prices and creating new ad-supported tiers that offer content at lower prices to consumers but also establish a new revenue stream for the companies.

The streaming providers said the price increases are warranted because of the amount of content offered. “We have plenty of room on price value,” Disney Chief Executive Officer

Bob Chapek

said Wednesday.

The price increases come as growth has stalled domestically, usually the most-profitable market for streamers. Just 100,000 of the 14.4 million net new subscriptions to its flagship Disney+ service in the most recent quarter came from the U.S. and Canada. Of the rest, about eight million came from India, while about six million came from other countries, including 52 new markets where Disney+ has launched since May.

“Domestically, Disney+ is tapped out,” said analyst Rich Greenfield of LightShed Partners. “Disney is operating under the belief that, just as in their theme parks, they can raise prices dramatically and count on customers not dropping the service.”

Disney said that in early December it will raise the price of its ad-free, stand-alone Disney+ service in the U.S., to $10.99 a month from $7.99, and the company will begin offering an ad-supported tier for Disney+, starting at $7.99. The company also announced increases to one of its bundle packages.

In addition, the company scaled back its projections for total global subscribers to Disney+, largely in response to lower anticipated growth in India, where Disney recently was outbid for the right to stream matches from a popular cricket league.

Markets welcomed news of the price increases and the company’s better-than-expected quarterly results. Shares of Disney rose 4.7% on Thursday to close at $117.69.

Investors and analysts expect higher subscription costs and the introduction of ads to Disney+ to result in higher profits from the streaming segment, but add that price increases risk alienating some customers and increasing the platform’s churn rate, or the percentage of users who cancel the service each month. The U.S. churn rate for Disney+ is already on the rise, increasing to 4% in the second quarter from 3.1% a year earlier, according to the media analytics firm Antenna.

“We do not believe that there’s going to be any meaningful long-term impact on our churn,” Mr. Chapek said about the price increases. He said Disney+ was one of the lowest-priced streaming services when it launched, and has become more valuable over time as it has added more popular shows and movies.

Other companies that focus on streaming video are making similar moves. Warner Bros. Discovery, the newly formed media giant that owns the premium television service HBO and the streaming services HBO Max and Discovery+, reported last week that it had added 1.7 million new subscriptions. As with Disney, about all of Warner Bros. Discovery’s subscription growth came from overseas—its direct-to-consumer segment lost 300,000 domestic subscribers in the quarter.

David Zaslav,

the newly formed company’s CEO, has taken an ax to Warner Bros. Discovery’s spending, scrapping multiple high-budget movies that were in production or near completion and destined for release on HBO Max, including “Batgirl” and “Wonder Twins,” after deciding that the best return on capital for them was a tax writeoff.

“Our focus is on shaping a real business with significant global ambition but not one that solely chases the subscribers at any cost or blindly seeks to win the content spending wars,” said JB Perrette, Warner Bros. Discovery’s head of streaming, on a call with analysts last week.

Warner Bros. Discovery said it expects losses in its streaming business to peak this year, and expects profitability for the segment in 2024. Similarly, Disney, whose direct-to-consumer segment has lost more than $7 billion since Disney+ launched in late 2019, predicts that Disney+ will achieve profitability by September 2024.

Warner Bros. Discovery has signaled it will launch an ad-supported tier of HBO Max next year. The company has alluded to a new pricing strategy focused on the goal of streaming profitability, but it hasn’t revealed pricing details.

“We will shift away from heavily discounted promotions,” Mr. Perrette said.

At Netflix, customer defections jumped after it raised the price of U.S. plans by $1 to $2 a month earlier this year. In the U.S. and Canada, the company lost 1.3 million subscribers during the second quarter, more than twice the 640,000 it lost in the region in the first quarter. Like Disney+, Netflix is now looking to increase the revenue per user that they draw by selling ads.

Doing so helps streaming services make more money from their existing customer bases, while offering an alternative to price hikes, according to industry analysts.

Existing subscribers to Disney+ will be automatically put into the ad-supported tier unless they elect the higher-priced ad-free version, and some shows, such as “Dancing with the Stars,” will stream with no ads on any tier, a Disney executive said. Disney said that in general, the ad load on Disney+ will be lighter than that of other services, and will benefit from consumers who cancel cable subscriptions and replace them with streaming services.

Netflix said in July that it expected some loss of customers following a price hike and that customer departures are returning to the levels where they were before the increase.

The Los Gatos, Calif.-based company has said its coming ad-supported tier of service is likely to appeal to more-price-conscious customers who are willing to pay less in exchange for viewing ads. Netflix hasn’t said how much its ad-backed tier will cost, but it is expected to charge less than the most basic plan that is currently available, which costs $9.99 a month for a single viewer with the lowest video-resolution quality.

While there has been an overall slowdown in net subscriber growth in the U.S. and more consumers jumping between streaming services, the amount of time people spend watching streaming content continues to grow, said Marc DeBevoise, CEO of the video technology company

Brightcove.

That trend makes selling ads a more attractive strategy for streaming services, he said.

“There aren’t more people to get to subscribe, but there are more hours to capture,” he said. “It is still a growing pie of total viewership.”

Write to Robbie Whelan at robbie.whelan@wsj.com and Sarah Krouse at sarah.krouse+1@wsj.com

Corrections & Amplifications
JB Perrette is Warner Bros. Discovery’s head of streaming. An earlier version of this article incorrectly said J.B. Perette. (Corrected on Aug. 11)

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Warner Bros. Discovery proposes “10 year plan” for DC

WB Studio Tour
Photo: Matt Winkelmeyer (Getty Images)

Can DC ever chart a course to navigate out of Marvel’s shadow? That’s been the question for the last 10 years (since the conclusion of Christopher Nolan’s Batman trilogy). Newly crowned Warner Bros. Discovery chief David Zaslav thinks he has the answer, which is… the same thing the guys before him tried to do, basically.

“You look at Batman, Superman, Wonder Woman, Aquaman—these are brands that are known everywhere in the world,” Zaslav said on the infamous WB earnings call (per The Hollywood Reporter). “We have done a reset. We’ve restructured the business where we are going to focus, where there is going to be a team with a ten year plan focusing just on DC. We believe we can build a much more sustainable business.”

Oh, gee, a 10 year plan? Why didn’t anyone think of that before? It’s a strange bit of corporate gaslighting to pretend we weren’t all around for the attempted Zack Snyder-verse. Further, it’s not much of a “reset” when only one film (Batgirl) was canceled and the rest–which are all still tangled up in the Snyderverse to some degree–are going forward (even the dreaded Flash film).

“It’s very similar to the structure Alan Horn, [former Disney CEO] Bob Iger and Kevin Feige put together very effectively at Disney,” said Zaslav, as if copy-pasting from the MCU handbook worked for any of his predecessors. He may want to consider that Feige is someone that directors actually want to work for; the Marvel boss’ compassionate response to Adil El Arbi and Bilall Fallah after Batgirl was canned only makes Zaslav and DC look even worse in comparison.

But Zaslav is determined to “focus on quality” and not “release any film before it’s ready,” which sounds more like the baseline for the film industry than an innovative new strategy. “The objective is to grow the DC brand. To grow the DC characters,” he said. “But also, our job is to protect the DC brand, and that’s what we’re going to do.” DC fans will surely sleep better knowing this is the guy protecting their beloved heroes.

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“Genredoms,” “male skew,” and other dumb stuff from today’s HBO Max/Discovery+ merger

Image: Warner Bros. Discovery

After days of taking precision hatchet shots to the library of his own streaming service, HBO Max, Warner Bros. Discovery CEO David Zaslav went in for the kill today. Talking to investors, Zaslav revealed on a Q2 earnings call his plans to smoosh together HBO Max and Discovery+ into one big, mushy ball of content that absotively, posilutely, won’t have any Batgirl movies on it.

Let’s be honest: It’s never great, PR-wise, when the graphics or language from these sorts of earnings calls—which by their very nature boil all art and entertainment down into a thin slurry of financial credits and demerits to be fed into the ever-hungry maw of The Investors—make it out into gen-pop for wider discussion. But Zaslav’s presentation has come in for some extra special mockery online today, especially for a slide that purports to show the differences between the two streaming services that will now by bridged by their forthcoming unholy spawn.

HBO Max, we are told, is “male skew,” “scripted,” “lean in,” “appointment viewing,” and, of course, “home to fandoms.” Discovery+, meanwhile, is “female skew,” “unscripted,” “lean back,” “comfort viewing,” and “home of genredoms”—which we’re pretty sure is when a classic science fiction novel slaps on the ol’ sex jeans and gives you the Christian Grey treatment. The “fandom” vs. “genredom” thing is mostly inscrutable, but we get the sense that folks mostly wouldn’t have roasted the slide too badly if Zaslav hadn’t opened with the whole “male skew” versus “female skew” thing—especially since a) we can name any number of HBO Max shows with passionate female audiences (and vice versa for Discovery+), and, b), all the descriptors for Discovery+ seem precision-engineered to annoy the hell out of any passionate fans of pop culture, like, say, the people who genuinely care about your poor, bedraggled streaming service, David.

Zaslav also posted a slide of the various assets from the paired streaming services, including a “franchises” entry that includes Harry Potter, the DC Superhero films, and, of course, the 90 Day Fiancé Universe, a vast cosmology of TV products about marrying people in less time than most people spend with a toothbrush. (Wait, should we be changing out our toothbrushes more often?)

Which is mostly dumb, but not necessarily a bummer. But never fear: Zaslav had a slide for that, too. Specifically, he had one describing all the alleged money-losing sins perpetrated by his predecessors, including CNN+ (which has now also been absorbed into Discovery+). The humdinger, as it were, is this line item (emphasis ours): “Approved additional spend on projects with uncertain financial returns including Kids & Animation, CNN+, certain Turner originals, and select direct-to-HBO Max feature films.) God forbid a studio spend money on TV or films with “uncertain financial returns,” but, don’t worry: Zaslav has a solution. Here’s a quick tip, kids: If someone tells their investors they’re “restructuring” the “content portfolio” of your job, it’s probably time to get some cover letters prepped. The company’s CFO later confirmed on the call that a decent chunk of the company’s kids and animation projects were on the chopping block.

Amidst all the carnage, Zaslav and his team also laid out a timeline for the merge of the two services: We can expect them to relaunch as a single entity in Summer 2023, no name or price points announced. The hybrid service is expected to launch in both ad-free and ad-supported forms.



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Twitter, Coca-Cola, Warner Bros. Discovery and more

Check out the companies making headlines in premarket trading.

Coca-Cola — Shares of Coca-Cola rose about 1% after the company beat analysts’ expectations on the top and bottom lines in the recent quarter. The beverage giant reported adjusted earnings of 64 cents per share on revenues of $10.5 billion, while analysts expected 58 cents per share on $9.83 billion in revenue.

Twitter — Twitter ticked 5% higher on reports that the social media giant is close to a deal with Elon Musk. It comes a day after the company’s board reportedly met Sunday to discuss a takeover bid from Elon Musk, who has already secured $46.5 billion in financing.

Oil stocks —Shares of energy companies fell on Monday as oil prices fell on fears of a global slowdown amid lockdowns in Shanghai. Chevron, ConocoPhillips, and Marathon Oil dipped 2.2%, 2.6% and 2.8% respectively.

Kellogg — Shares of Kellogg dipped 1.8% after Deutsche Bank downgraded the stock to a hold. The bank cited the impact from workers’ strikes, rising inflation and supply chain disruptions among the reasons for the downgrade.

Verizon — Verizon shares fell 1% after Goldman Sachs downgraded the stock to neutral. The bank said Verizon is situated well for 5G growth but offers a lower potential return compared to peers like AT&T.

Penn National Gaming — The gaming stock rose 2.8% after Morgan Stanley named it a buy despite its recent underperformance. The bank also sees opportunities in its Barstool Sports and theScore businesses.

Warner Bros. Discovery — Warner Bros. Discovery’s stock fell 2.5% as investors continued to digest the news that the company would shutter its CNN+ service weeks after its launch.

Deere — The equipment manufacturer’s stock fell 3.4% after Bank of America downgraded the stock to neutral. The bank said it remains cautious on the farm economy and agricultural equipment space amid ongoing supply chain issues and other macro trends.

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How Netflix’s password-sharing crackdown is likely to work

Netflix signage next to the Nasdaq MarketSite in New York, U.S., on Friday, Jan. 21, 2022.

Michael Nagle | Bloomberg | Getty Images

Netflix surprised the world this week, saying it plans to finally address the rampant practice of password sharing.

More than 100 million households are using a shared password, Netflix said Tuesday, including 30 million in the U.S. and Canada.

But the video streamer doesn’t plan to simply freeze those shared accounts. Instead, the company will likely favor the setting of an extra fee for those accounts being used by multiple people outside of the home.

Netflix’s plan to capture that lost revenue would start with an alert being sent to account holders whose passwords are being used by other households.

The company has already started a test of this feature in Peru, Costa Rica and Chile. For accounts that are sharing a password across addresses, Netflix is charging an additional fee to add “sub accounts” for up to two people outside the home. The pricing is different per country — about $2.13 per month in Peru, $2.99 in Costa Rica, and $2.92 in Chile, based on current exchange rates.

The company also allows people who use a shared password to transfer their personalized profile information to either a new account or a sub account, allowing them to keep their viewing history and recommendations.

“If you’ve got a sister, let’s say, that’s living in a different city, you want to share Netflix with her, that’s great,” said Chief Operating Officer Greg Peters during the company’s earnings conference call. “We’re not trying to shut down that sharing, but we’re going to ask you to pay a bit more to be able to share with her and so that she gets the benefit and the value of the service, but we also get the revenue associated with that viewing.”

Netflix didn’t say how much revenue it expects to generate from implementing its sharing strategy worldwide, though Peters said he thought it would take about a year to put its sub account pricing into use globally.

A survey from research organization Time2Play suggested about 80% of Americans who use someone else’s password wouldn’t get their own new account if they couldn’t share the password. It didn’t survey how many current account payers would be willing to pay more to share with others.

Peters also suggested the company may still tweak pricing or further review its test strategy.

“It will take a while to work this out and to get that balance right,” he said. “And so just to set your expectations, my belief is that we’re going to go through a year or so of iterating and then deploying all of that so that we get that solution globally launched, including markets like the United States.”

Unanswered questions

Netflix’s plan is unprecedented. No major streamer has ever cracked down on password sharing before. Other owners of streaming services, such as Disney, Warner Bros. Discovery, Comcast’s NBCUniversal and Paramount Global, will likely not set their own plans until after reviewing Netflix’s password-sharing reforms.

Some account holders will undoubtedly be surprised when they receive news from Netflix that their passwords are being shared. It’s also unclear how long Netflix would allow those watching on a shared account to maintain access if the primary account holder chooses not to pay the additional fee.

In addition, Netflix will have to tread lightly around defining password sharers to avoid wrongly tagging people as abusers, such as family members temporarily living away from home.

An unwillingness to act against this group of users would probably save millions of people from Netflix’s crackdown — at least to begin with.

“They’ll start with serial abusers,” said LightShed Partners media analyst Rich Greenfield. “If you have 15 people using your account, it’s pretty easy.”

The company also isn’t likely to want its employees mired in disputes about what classifies as a home account and what qualifies as a sub account. Contesting those definitions could get ugly for both staffers and customers, who have up until now seen Netflix as a best-in-class brand.

But “Netflix knows who you are,” said Greenfield, whether you’re using your own personalized profile or not.

Five years ago, Netflix actually encouraged password sharing. The company’s philosophy at the time was it simply wanted more eyeballs on its content, which in turn would create buzz and lead to actual subscriptions. That strategy seemed to pay off. Netflix subscriptions have grown every quarter for more 10 years — until last quarter.

In 2017, Netflix’s corporate account tweeted “Love is sharing a password.”

Now, the company would love it if you stopped doing so.

Disclosure: Comcast’s NBCUniversal is the parent company of CNBC.

WATCH: Netflix to test extra fee for password shares

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I’m sticking with Bausch Health

Tredegar Corp: “I remember when they became public. I was involved in the deal. I thought it was terrific then, I think it’s terrific now.”

Bausch Health Companies Inc: “Joe Papa’s going to split into three companies, and I happen to like all three companies. I think it’s going to work. … I’m sticking with Joe. Joe’s a money maker.”

Diodes Inc: “Very inexpensive semiconductor company, and the semiconductor stocks are hated right now. I think you have to wait until one of the semis, the big guys, really does poorly, and then you can buy this.”

Warner Bros. Discovery: “I think you’re going to have to take pain [if you own the stock].”

Disclosure: Cramer’s Charitable Trust owns shares of Bausch Health.

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