Live TV streaming company FuboTV (NYSE:FUBO) took its shareholders on a wild ride during the past couple of months. Only investors with iron stomachs could handle the huge ups and downs of FUBO stock.
Suffice it to say that FUBO isn’t for everyone, and is best left to folks who can handle volatility. Still, if you survived the stock price roller coaster, then you might want to hold on for potential gains.
What could possibly catalyze FuboTV’s gains in the coming months? After all, the holiday shopping season has already passed. And, the distribution of Covid-19 vaccines isn’t necessarily going as smoothly as some people had hoped it would.
Perhaps a recent acquisition, and a foray into a red-hot market niche, could perk up the FUBO stock bulls and capture a whole new audience for FuboTV in the near future.
A Closer Look at FUBO Stock
We’ll get to that value-added acquisition in a moment. But first, let’s delve into the notoriously wild price action of FUBO stock.
While FUBO stock came onto the radar of some traders not too long ago, the shares have actually been publicly tradable for over a year and a half. For much of that time, however, the share price was trapped under the $10 resistance level.
There was a jailbreak attempt back in May of last year. The bulls even managed to push the FUBO stock price up to $18 at that time. Yet, that buying spree was short-lived and the stock soon fell back below $10.
Now, the fourth quarter of 2020 was a different story entirely. Amazingly, the buyers managed to bring the FUBO stock price up to $27 in November, and then to a dazzling 52-week high of $62.29 in December.
Unfortunately, folks who chased FUBO stock near the peak soon learned a painful lesson as the share price crashed in late December and early January.
Today FUBO stock is about $31.25, or roughly half of December’s peak price. At least we can say that there’s a more favorable entry point for anyone who wants to start accumulating the shares.
Branching Out
The best way that I could describe FuboTV’s business model would be to steal a phrase from InvestorPlace contributor Sarah Smith. She called FuboTV “a better-priced competitor to YouTube TV and Sling TV.”
That’s a very apt description of what FuboTV does. At the same time, some folks have compared FuboTV to the much more popular streaming service Netflix (NASDAQ:NFLX).
To be honest, FuboTV might not be the best bet in the content streaming space. Since FuboTV offers 113 channels for $65, consumers could easily find competing streaming platforms that offer more for less.
But now, it appears that FuboTV is branching out into an area that’s dominated by DraftKings (NASDAQ:DKNG), not Netflix. I’m referring to sportsbook betting, sometimes also known as i-gaming.
Betting on the Sportsbook
As it turns out, FuboTV is acquiring a sports-betting and interactive-gaming company known as Vigtory. Moreover, FuboTV announced its plans to launch a sportsbook by the end of this year.
FuboTV reports that it “intends to leverage Vigtory’s sportsbook platform and digital gaming assets, and its consumer-driven betting technology, to develop a frictionless betting experience for Fubo’s customers.”
Sweetening the deal is the fact that Vigtory has secured an agreement in Iowa through Casino Queen.
Wedbush analyst Michael Pachter evidently sees the value in the Vigtory acquisition, as he wrote that sports betting “adds yet another layer of customer monetization beyond premium subscription plans and highly valuable advertising inventory.”
I tend to concur with Pachter on that. By venturing into the sportsbook niche, FuboTV won’t have to compete head-to-head with Netflix in that endeavor. And the less competition, the better.
The Bottom Line
It’s hard to say whether FUBO stock will stage a full recovery after its precipitous drop.
With FuboTV’s value-added venture into the sportsbook space, though, there’s reason to believe that new directions can bring new revenues.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.
