Once a hot stock, FuboTV (NYSE:FUBO) lost steam when it posted Q4 results. The NASDAQ’s selloff in the last week is not helping FUBO stock, either. Even though valuations are still unfavorable and short-sellers are circling the stock with a 17.3% short interest, this trade may pay off.
FuboTV posted a $2.47 EPS loss in Q4. It grew its revenue by 83% Y/Y, led by ad revenue growing 73% Y/Y. Its worldwide sports betting is a positive catalyst. Despite near-term losses, FUBO stock has strong long-term upside potential.
The company established an agreement with Major League Baseball and the NBA. It authorized gaming operator for both leagues and with its Vigtory acquisition, may potentially justify FUBO’s upside.
Vigtory is not yet a proven winner. It was founded in 2019 and has less than 10 employees. It has no product on the market or any revenue. Still, Fubo may execute on its acquisition and would justify the call for a rebound in shares.
Recently, FuboTV shorted up its cash position by selling $350 million worth of notes on Jan. 29. The cash increase will pressure short-sellers, while current shareholders get diluted by over 160 million shares. Interest rates are low, keeping interest rate costs on debt minimal.
Fortunately, it is a small future dilution if not bought back by the company. This wouldn't happen until 2026.
Keep an eye on FuboTV stock.
