What Happened?
Shares of live sports and TV streaming service fuboTV (NYSE: FUBO) fell 10.6% in the afternoon session after the company reported third-quarter results that showed declining revenue and a significant increase in cash burn, even as it surpassed Wall Street's earnings and sales estimates.
Although fuboTV's adjusted earnings of $0.02 per share were better than the loss analysts had expected, investors focused on more troubling trends. Total revenue fell 2.3% year on year to $377.2 million. The most significant concern appeared to be the company's cash usage, as free cash flow was a negative $9.41 million, a sharp deterioration from the negative $1.12 million reported in the same quarter last year. While the company's domestic subscriber count grew slightly year on year, the falling revenue and increased cash burn likely prompted the negative market reaction.
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What Is The Market Telling Us
fuboTV’s shares are extremely volatile and have had 55 moves greater than 5% over the last year. But moves this big are rare even for fuboTV and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 5 days ago when the stock gained 5.5% on the news that the company announced it closed its previously announced business combination with The Walt Disney Company's Hulu + Live TV business. The transaction created the sixth-largest Pay TV company in the U.S., with nearly 6 million subscribers across North America. Under the terms of the deal, Disney held an approximate 70% interest in the new entity, while existing Fubo shareholders retained about 30%. Despite the combination, both Fubo and Hulu + Live TV would continue to be offered as separate services. Fubo's existing management team, led by CEO David Gandler, was set to operate the combined business. As part of the agreement, Disney also committed to provide a $145 million term loan in 2026 to support growth and integration.
fuboTV is up 141% since the beginning of the year, but at $3.40 per share, it is still trading 37.7% below its 52-week high of $5.46 from January 2025. Investors who bought $1,000 worth of fuboTV’s shares 5 years ago would now be looking at an investment worth $227.72.
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