The announcement that ESPN, Fox and Warner Bros Discovery were forming a new sports streaming venture sent shares of sports-oriented Fubo spiraling downward.
Fubo stock was down 25% to $1.88 a share in Wednesday morning trading.
“This latest development acts as further confirmation of heightened competition, which may hinder Fubo's growth, churn, timeline to profitability, and pricing power, especially with Fubo’s variable cost structure,” said a report by Roth MKM analysts Darren Aftahi and Dillon Heslin, which was obtained by Seeking Alpha.
Roth MKM lowered its target price for Fubo shares to $2 from $3.25
Fubo had no comment.
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Cantor Fitzgerald analysts Brett Knoblauch and Thomas Shinske were also pessimistic about Fubo in light of the new rival.
“Optically and competitively, this is a negative development for Fubo, which prides itself on being the place to stream live sports,” the analysts said in another report obtained by Seeking Alpha. “Fubo currently provides access to the majority of the Disney and Fox family of networks (it does not have WBD networks), meaning this new joint venture could effectively replicate much of what Fubo has to offer.”
Fubo lost $83.8 million in the third quarter despite a 43% increase in revenues to $420.9 million.
The company had 1.477 million paid subscribers and was looking to produce positive cash flow in 2025.
