The stock price of FUBO TV plunged drastically by 16.30% for the past 5 days. The price dropped from $16.20 to $13.98 from January 3rd to January 7th. The shares dropped down after FY 21 Q4 results came out. FUBO TV is a leading sports first-line streaming platform and focuses on channels that distributed live sports. The company performed tremendously well for the past years since 2015. From a soccer streaming service in 2015 to an all-sports service in 2017 to becoming a virtual multichannel video programming distribution model. The company closed 3rd quarter of 2021 with 1 million subscribers. The company also acquired Molotov, the Paris-based live streaming platform in December.
In addition to this, recently the leading American streaming service provider disclosed its quarter 4 financials of 2021. It has announced preliminary 4th quarter 2021 results including revenue and subscriber growth at the 24th annual Needham virtual growth conference. The financials showcased a bright picture above the levels of everybody’s anticipations. It exceeded the set targets and transcended everybody’s expectations by setting a brand new benchmark as the revenue and growth exceeded price guidance.
The company achieved revenue growth of 138%, it is expected to achieve –
– Revenue between $215 to $220 million dollars, that is, an increase of 105-109% year on year. (Prior guidance for the quarter was $205 to $210 million per quarter.)
– Paid subscribers at year-end are expected to exceed 11,00,000, that is, an increase of more than 100% year on year. (Prior guidance for the quarter was 10,60,000 – 10,70,000 at year-end.)
– Subscriber acquisition cost is expected to remain low and subscriber revenue is expected to be more than 25 million dollars.
The aforementioned figures present a very rosy picture of the company’s performance. So what is the reason behind the plummeting stock price of a company with such gravely promising figures?
The shares are down by 1.8% pre-market today, sure the revenue rises but losses continue too, the company may need to raise more money. FUBO TV’s net losses are diluting shareholders, the investors are raising concern over the cost of that growth. With the growth, FUBO TV lost $106 million on the bottom line. Those are heavy lines. The expenses as a percentage of revenue were 165.5%. The majority of the costs were subscriber-related expenses (at 91.5% of revenue). With each new subscriber, FUBO TV needs to pay media companies like Disney.