When it comes the stock market, timing is everything. And the timing has never been more perfect for fuboTV (NYSE:FUBO) stock — that’s why I’ve added FUBO stock to my Innovation Investor portfolio, which is focused on investing in the most innovative, disruptive technology companies that are fundamentally changing the way the world works, with the goal of achieving 2X, 5X, even 10X returns.
There are currently three factors working in favor of FUBO stock at the current moment:
- The fundamental picture is improving, as evidenced by content wins, strong earnings, and expanded distribution partnerships.
- Meme stocks are soaring once again, and fuboTV stock counts itself as one of the retail crowd’s favorite stocks.
- fuboTV is heavily shorted, and if history repeats with meme stocks, you could see some big short squeeze pops in heavily-shorted retail favorites like FUBO stock.
Needless to say, then, FUBO stock — which has been beaten and bruised thus far in 2021 — looks due for an enormous comeback.
Here’s a deeper look.
FUBO Stock: The Fundamentals Are Improving
The first reason to bet on FUBO stock to make a big comeback over the next few months is that the streaming company’s core fundamentals are improving.
In short order, the bear thesis is falling apart, and the bull thesis is gaining momentum.
Bears said fuboTV was a just a “Covid-19 story”, and that once the societal effects of the pandemic faded, consumers would go back outside again and fuboTV’s growth narrative would fall apart.
Not happening. fuboTV crushed first quarter numbers, powered by 105% subscriber growth and 135% revenue growth. More importantly, management raised in full-year 2021 forecast, calling for 95% revenue growth — better than 2020’s revenue growth rate of 83%. In other words, growth is accelerating in the aftermath of the Covid-19 pandemic, not decelerating as many feared, because a big pop in ad spending is offsetting a mild slowdown in sub growth.
Meanwhile, bears also said that fuboTV was just another commoditized streaming service with unoriginal content. But, just a few months ago, fuboTV won the streaming content rights for qualifying matches of the Qatar World Cup, and just a few weeks ago, fuboTV announced new original shows from Terrell Owens, Matthew Hatchette, and Gilbert Arenas on the Fubo Sports network.
In essence, fuboTV is doing what the bears said it wouldn’t — building a moat through exclusive, sports-first streaming content, an d becoming a streaming hub for sports fan across the globe.
And, finally, bears expressed concern over fuboTV’s ability to distribute its service in a very competitive AVOD market. But fuboTV just announced a big partnership in which a premium version of the company’s app will be offered as a free trial to LG smart TV owners. LG is a huge smart TV player, with somewhere around 20% market share. All of those LG smart TV owners will have the chance to try a premium version of fuboTV for free.
All in all, the bear thesis is losing credibility. The bull thesis is gaining momentum. This provides support for continued strength in FUBO stock.
Meme Stocks are Back
fuboTV is a streaming media company. But FUBO stock also doubles as a meme stock — or a stock preferred by the retail traders that flock into momentum trades based on what’s mentioned on social media boards across the internet.
According to Swaggy Stocks, FUBO stock is one of the most mentioned stocks on Reddit.
That’s important, because meme stocks are making a big comeback right now. GameStop (NYSE:GME). AMC (NYSE:AMC). Koss (NYSE:KOSS). Bed Bath & Beyond (NASDAQ:BBBY). They’re all making huge moves right now, as retail traders have once again banded together to influence stock prices.
As we saw the last time this happened — late January and early February — these social momentum trades can last for a while. And they can leave stocks at a permanently high level.
With FUBO stock caught up in the frenzy, that is simply more firepower to help push and keep fuboTV stock prices even higher in the coming months.
What About the Short Squeeze Potential?
One consistent feature of meme stocks is that they tend to be heavily-shorted stocks. Most of them have a short interest north of 20%. That’s because retail traders believe that in those stocks, they can add some extra “juice” to the rally by squeezing the short-sellers and forcing them to cover, thereby adding more buying pressure to the stock.
FUBO stock has a short interest as a percent of its float at 18%.
That’s high — high enough to spark a short squeeze.
Indeed, I think a big short squeeze is very likely. There’s simply too much momentum here to not attract a lot of buyers into this name, which will in-turn spark a huge rally and subsequent short covering.
The stage is set for big gains ahead in FUBO stock.
Bottom Line on FUBO Stock
FUBO stock is a great play on the fact that the world is pivoting from linear TV to streaming TV. This pivot encompasses fuboTV, Netflix (NASDAQ:NFLX), Roku (NASDAQ:ROKU), Disney (NYSE:DIS), AT&T (NYSE:T) and so many more.
By the end of the decade, everything we watch will be through the internet. Cable boxes will be as obsolete as CD players are today.
Netflix stock is the blue-chip stock to buy to play this streaming revolution. Roku stock is a higher-upside, yet relatively safe bet. FuboTV stock may be the highest upside play in the space. You can read more about it in my free eletter, which is focused on highlighting emerging companies pioneering breakthrough technologies and business models that could change the world.
FuboTV fits that billing. It’s the next Netflix.
But it’s one of dozens stock picks we cover each day the markets are open in Innovation Investor.
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On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
By uncovering early investments in hypergrowth industries, Luke Lango puts you on the ground-floor of world-changing megatrends. It’s the theme of his premiere technology-focused service, Innovation Investor. To see Luke’s entire lineup of innovative next-generation technology stocks, become a subscriber of Innovation Investor today.