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PreMarket Prep Stock Of The Day: FuboTV

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PreMarket Prep Stock Of The Day: FuboTV

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

On the PreMarket Prep Show, we mostly discuss what is happening in the now, but often analyze issues from a longer-term perspective. One issue, that was brought to our attention by Benzinga’s Mitch Hoch was FUBOTV Inc (NYSE: FUBO), the PreMarket Prep Stock Of the Day.

The Company: FuboTV offers consumers a live TV streaming platform for sports, news and entertainment through fuboTV. The company generates revenue through the sale of subscription services and the sale of advertisements in the United States.

The Call: In mid-October, when the issue was trading at the $11 area, Hoch was on the broadcast to discuss his bullish thesis.

He became bullish on the issue for a different reasons. First of all, he thought the timing of the issue moving from the OTC market to the NYSE would bring more attention and more trading volume. Also, there focus in sports programming coinciding with the increase in streaming due to the pandemic put the company in a good position to prosper when sports resume. 

Finally, FuboTV's expertise in the streaming sports field may make the company a potential buyout target for wireless companies such as T-Mobile (NASDAQ: TMUS) or Verizon (NYSE: VZ).

Notable Insider Buy: What originally instigated Hoch’s interest in the issue was a sizable insider buys. On Oct. 14, it was reported that the executive board chair at FuboTV, Edgar Miles Bronfman Jr., indirectly purchased 200,000 shares of the TV streaming platform for the public offering price of $10 each.

Another director also added 200,000 shares last week. That cost them $4 million altogether.

Q3 Report: After the close on Tuesday, the company announced its first quarterly report since being listed on the NYSE.

It posted an EPS loss of $1.65 along with a sales beat of $7.31. Based on the price action, the Street is focusing on the sales beat as opposed to the EPS figure. Also, the company issued fourth-quarter, 2020 and 2021 sales guidance above estimates.

Another potential catalyst is the company is entering the online sports betting market.

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What Now? When the issue was being discussed on Wednesday's show, it was trading in the $20 area, with  apremarket high in place at $21.50.

Hoch was cautious on the potential for further upside in the issue. 

"This could be as good as it gets. With the stock being up so much off the report, are buyers going to step in?” he said, adding that this could be a trouble area. 

Price Action During Regular Session: After a higher open Wednesday, FuboTV made an attempt to reach the premarket high, but came up well shy, peaking at $20.40 and reversing course.

As of 12:30 p.m. the ensuing decline had taken the issue to $17.10, which is still not near the top of Tuesday’s range ($15.80). At the time of publication, the stock was up 6.07% at $16.60. 

The full discussion on the issue from today’s show can be found here:

 

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