It is clear to Jim Cramer that there is a sector-wide decline in media stocks, prompted on Wednesday by Disney's admission of a loss in cable subscribers which sent investors into a state of panic. Could this be the end of the world for media stocks?
"No, but it's certainly the end of their high valuations," the "Mad Money" host said.
In Cramer's perspective, Disney is different from all of the other media companies. Programming at all of the other cable TV companies contains content that can be streamed, which means their channel can be dropped from a cable subscriber's bundle.
You can watch anything on Viacom at a later date, thus there is no immediacy, which is why the stock has been hit the hardest. However, users cannot stream ESPN, and sports have no shelf-life—which are the bread and butter of Disney's cable offering.
So, if Disney is different from the rest of the pack, why is it still in meltdown mode?
It all boiled down to the mechanics of the stock market for Cramer. Stocks that have a gigantic decline, like Disney, tend to get hammered on the second day, too. Meaning, big institutions that were selling massive quantities of the stock and didn't finish cleaning house on the first day.