fuboTV (NYSE: FUBO) in a competitive market. But can a sports-focused streaming platform prevail in adding a sports betting component to its platform? In this clip from “IPO & SPAC Show” on Motley Fool LifeAnd Recorded on April 11thMotley Fool contributors Nicholas Rossolillo, Danny Vina, and Jason Hall discuss finances, growth and the challenges facing fuboTV.
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Nicholas Rossolillo: Here is where fubo’s IPO date was October 7, and $183 million was raised through this public sale. The IPO price went up 10% and then as the rest of 2020, then in early 2021, the stock price went up dramatically and that ties into what Jose was talking about just a few minutes ago. kings (NASDAQ: DKNG). Obviously, this is their TV broadcasting platform. But the really exciting part that I think investors loved about fuboTV was the integration with sports betting on their platform. Good revenue growth in 2020, significant operating loss, negative free cash flow. But the company was growing a large number of new subscribers, and then quickly advanced to 2021, another big jump in the number of subscribers up to 1.3 million. Revenue doubled on an organic basis, excluding two acquisitions they made. They released fubo Sportsbook. Introducing a sports betting component on the platform. I think that’s what got a lot of investors excited. But that is the reality with this company. Big operating losses and a balance sheet isn’t really what you want to see, I don’t think, if you’re looking at a new investment in new stock, $374 million in cash. They already have $316 million in debt, and based on their liquidity burn rate, we’re looking at this company that has to raise more cash either by secondary offering more equity, maybe raising some additional debt. I don’t know. What do you guys think about fubo here? I think the story is interesting. Broadcast TV is clearly great. There is an element of sports betting but the financials don’t go along with me.
Jason Hall: One of the things I struggle with with fubo is that unlike a lot of other platforms, it doesn’t own the content, and will always fight the battle of content and sports, something that’s really focused on it. Even niche sports are tough and competitive and that’s tough and you don’t want to be a company that’s running out of money, burning money with your stock down 80% of the IPO price and looking forward to a secondary action. It’s a tough time now to be in this business.
Danny Vina: If you’re looking for someone to assuage your lack of enthusiasm for this company, you won’t find them here because I remember reading a story that said they raised their prices even though they lost TNT and TBS, pretty big draws for companies sticking with the cable option.
Hall: Well, that’s basketball too, TNT and TBS, a lot of basketball and baseball.