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.
Stocks that are volatile tend to stay that way in both directions. With that in mind, live TV streaming platform FuboTV Inc. (NYSE:FUBO) is the PreMarket Prep Stock of the Day.
A Knock-Your-Socks-Off Rally: After ending the session on Nov. 13 at $15.32, FuboTV embarked on an incredible rally. A little over a month later, it peaked Dec. 22 at $62.29 and ended the session just off that level at $62.
The Initial Catalyst For FuboTV's Retreat: As is so common when an issue makes such a parabolic move, there is a catalyst to knock it off its perch.
Since the company is not widely followed by Wall Street analysts, when one does make a change, it can have a big impact on the issue.
One day after making its all-time high, BMO downgraded FuboTV from Outperform to Market Perform and raised the price target from $33 to $50.
Since the issue was still trading above BMO's price target, some investors decided to take profits in the issue Dec. 23.
On that day, it fell from its all-time closing high price ($62) to $52.59, which was just off the low for the day of $52.50. It should be noted that the low exactly matched the previous day’s low, putting an all-important double bottom in place.
No Such Thing As A Triple Bottom: Following its lousy day on Dec. 23, Rich Greenfield of LightShed Partners initiated the issue with a Sell rating and $8 price target.
After opening below the pair of lows from the last two sessions, the floodgates opened and the issue fell from $52.59 to $44.18.
Greenfield followed up his Sell recommendation on the company with a relentless attack on the company on Twitter.
Throwing Fuel On The Fire: With clear momentum to the downside and trapped buyers from much higher levels, Kerrisdale Capital bashed the company on Twitter as well.
We're short $FUBO. Report available at https://t.co/I7vUccTemK. Structurally unprofitable business model ridiculed by nearly every industry executive we spoke with. Recently collapsed app download data a sign of things to come
— Kerrisdale Capital (@KerrisdaleCap) December 30, 2020
The report instigated another leg lower and on Jan. 4, the issue finally bottomed at $23.17 and began to rebound.
News Flow Turns Positive, FuboTV Rally Follows: Before the open on Jan. 5, the company reported fourth-quarter preliminary sales and subscriber results both above analyst estimates ($80-$85 million to $94-$98 million vs. an $87.4-million estimate). Also, FuboTV raised its goal for paid subscribers at year-end from 500,000-510,000 subscribers to over 545,000.
Investors are moving into the issue in Tuesday’s session as the company announced the acquisition of Vigtory, including Its sportsbook technology and pipeline of market access agreements.
Recent FuboTV Price Action: After a higher open Tuesday, FuboTV retreated, then found support above the top of Tuesday's range ($28.94) at $29.55 and resumed its move higher.
It has continued to make new highs for the session and $33.25 stands as the current one as of 1:50 p.m. That coincides with its Dec. 30 close of $33.31.
The stock was trading 20.8% higher at $32.81 at last check.
Since the issue has such a hard fall from grace, the next daily high is not until its Dec. 30 high ($38.99).
© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.