After surging to $62 a share on Dec. 22, the most volatile stock in the video business has come crashing down, with fuboTV trading at just under $24 as of midday on the Nasdaq.
The swift decline comes after LightShed Partners analyst Richard Greenfield threw cold water on the fuboTV, which IPO’d in October.
“There is no special sauce [for] Fubo, which can turn the fundamentally flawed MVDP/vMVPD business into a good one, especially if it lacks scale and other products to bundle,” Greenfield wrote in a note to investors on Dec. 27.
BMO Capital Markets also issued a downgrade for the stock last week.
FuboTV, however, does have plenty of bulls in its corner, too. Notably, Needham analyst Laura Martin re-affirmed her “buy” rating for the stock last week at a $60 price target.
On Tuesday (Jan. 5), the stock bounced back in early trading (up about $5, or 20%, to above $29) after saying it expected to report revenue and subscriber gains in the fourth quarter.
Supporters believe the virtual pay TV service, which has focused on licensing national, international and regional sports networks, has the ability to carve out a unique niche, integrating features like sports betting down the road.
In addition to its core vMVPD, fuboTV also operators the Fubo Sports Network, a 24/7 live programming channel distributed through myriad OTT platforms.
FuboTV has some notable backers: Last week, for instance, hedge fund Islet Management disclosed that it controls a 7% stake in fuboTV. Also, media companies including Disney, Discovery, AMC Networks and others have acquired stakes in the company tied to their content licensing deals.
Also worth mentioning: Veteran media executive Edgar Bronfman Jr. recently became the company’s executive chairman.
FuboTV’s revenue rose 47% in Q3 to $61.2 million, with subscribers growing 58%.
But with the company reporting a net loss of $274.1 million, fuboTV has a long way to go before it can be correctly valued at or above some of the companies it momentarily usurped on Wall Street, reasoned Greenfield, who initiated coverage of the stock on Dec. 23 with a sell rating and target price of $8 a share.
“The company has told a story which has been embraced by an army of retail investors. However, Fubo is not Netflix, Fubo is not Flutter/FanDuel, DraftKings nor even Penn/Barstool Sports, Fubo is not Roku and Fubo is not Trade Desk. Fubo is simply just another virtual multichannel video programming distributor (vMVPD) facing the same obstacles and financial challenges as every other vMVPD,” Greenfield said.
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