Streaming provider FuboTV (FUBO) has been in the middle of a lot of change, challenge and controversy lately. Much of this has stemmed from its challenge to Venu Sports, an online, pure-play streaming platform for sports television. Now, one of its challengers, DirecTV, turned its attention to the dismissal of FuboTV’s lawsuit against Venu Sports.
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Fubo filed its lawsuit against Venu Sports back in February, and a judge stepped into block the deal that would have created Fubo around six months later, in August. Just days ago, Fubo returned to court, seeking to dismiss the lawsuit after one of the participants in Venu Sports, Disney (DIS), agreed to merge its Hulu + Live TV service with Fubo, a move that would have made Fubo the second-largest digital pay-TV provider on Earth.
But—DirecTV noted, stepping in—the dismissed lawsuit does nothing to address the inherent claims of Fubo’s lawsuit: that Venu Sports would represent a reduction in competition as well as hiked prices to consumers. Interestingly, a similar letter was penned by the other leader in satellite television, EchoStar, of Dish Network. DirecTV’s letter noted that “…defendants pay off and seek to subsume the very competitor that raised these antitrust violations to the Court.”
Hiding Behind Fubo’s Flag
A report from The Verge also offered comment in this vein. DirecTV and EchoStar were in line to be similarly impacted by Venu Sports, as an online pure-play streaming venue for sports would, ultimately, render a lot of DirecTV and EchoStar’s own offerings moot. Moot, and probably overpriced as well. Having Fubo throw itself judicially into the path of that oncoming train was likely good news for DirecTV and EchoStar, until the deal hit.
So now, DirecTV and EchoStar are left with little option but to raise the banner themselves, as Fubo has been, effectively, convinced to depart the field. And that is leaving this new coalition, down one member, to carry on in Fubo’s place.
Is Fubo Stock a Good Buy?
Turning to Wall Street, analysts have a Hold consensus rating on FUBO stock based on two Buys, five Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 81.97% rally in its share price over the past year, the average FUBO price target of $3.91 per share implies 26.92% downside risk.
