fuboTV (NYSE: FUBO) is in a competitive market. But can the sports-focused streaming platform win by adding a sports-betting component to its platform? In this clip from “IPO & SPAC Show” on Broget Fool Live, admitted on April 11thMotley Fool contributors Nicholas Rossolillo, Danny Vena and Jason Hall discuss fuboTV’s finances, growth and challenges.
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Nicholas Rossolillo: Here’s where fubo was listed on october 7, raising $ 183 million via public sale. The IPO price rose by 10%, and as the rest of 2020 progressed, and then early in 2021, the stock price skyrocketed, and this is related to what Jose was talking about a few minutes ago. DraftKings (NASDAQ: DKNG). This is obviously its TV streaming platform. But the really exciting part that I think investors liked about fuboTV was the integration with sports betting on their platform. Nice revenue growth in 2020, large operating loss and negative free cash flow. But the company grew a lot of new subscribers, and so fast forward to 2021, another big jump in subscribers up to 1.3 million. Revenue more than doubled on an organic basis, excluding a few acquisitions. They published fubo Sportsbook. Introducing this sports betting component on the platform. I think that was what excited many investors. But here’s the reality with this company. Large operating losses and the balance sheet are not really what you want to see, I do not think if you look at taking on a new investment in the fresh stock, $ 374 million in cash. They already have $ 316 million in debt, and based on the burnout rate of cash, we see this company having to raise some more liquidity either through a secondary offering of more shares, perhaps traveling through some more debt. I do not know. What do you think about fubo here? I think the story is interesting. Clearly, TV streaming is amazing. There is the sports betting component, but the economy just does not suit me.
Jason Hall: One of the things that I have just been challenged with fubo is unlike many other platforms, it does not own the content and it will always be fighting the content battle and sport which is something it really focuses on. Even niche sports are tough and competitive and it’s challenging and you do not want to be a company running out of money burning cash with your stock down 80% from its listing price wanting to do a secondary. It’s a challenging time right now to be this company.
Danny Vena: If you were looking for someone to dampen your lack of enthusiasm for this company, you will not find it here because I remember reading a story that said they raised their prices even though they lost TNT and TBS, which is right Broadly. for companies that stick to the option of streaming cable.
Hall: There is also basketball, TNT and TBS, a lot of basketball and baseball.
Danny Vena has no position in any of the aforementioned shares. Jason Hall has no position in any of the aforementioned shares. Nicholas Rossolillo has no position in any of the aforementioned shares. The Motley Fool owns and recommends fuboTV, Inc. The Motley Fool has an enlightenment policy.