Is FuboTV (FUBO) Stock a Buy For 2021?

Alex Smith
·4 min read

Greenlight Capital Fund recently released its Q4 2020 Investor Letter, a copy of which you can download here. The fund posted a return of 5.2% in 2020, underperforming its benchmark, the S&P 500 Index which returned 18.4% in the same period. You should check out Greenlight Capital’s top 5 stock picks for investors to buy right now, which could be the biggest winners of 2021.

In the Q4 2020 Investor Letter, Greenlight Capital highlighted a few stocks and FuboTV Inc. (NYSE:FUBO) is one of them. FuboTV Inc. (NYSE:FUBO) is an internet television service provides. In the last three months, FuboTV Inc. (NYSE:FUBO) stock gained 186.3% and on January 21st it had a closing price of $35.50. Here is what Greenlight Capital said:

"FuboTV (FUBO) is a streaming service that offers a sports-focused “skinny” bundle of TV channels that also includes a variety of news and entertainment content. Essentially, this is the type of package that Apple unsuccessfully tried to assemble for years. While FUBO does not currently achieve the gross margins that Apple reportedly sought, FUBO expects to primarily earn profits on advertising and online sports wagering. Our average effective price (we owned shares and warrants) was $5. The shares surged from the $10 October IPO price to end the year at $28. The huge move brought to light a number of bear cases that we believe misapprehend FUBO’s lucrative opportunity in online sports wagering.

The bears contend that the sports wagering market is small and FUBO won’t be able to compete with established books like William Hill or Caesars Entertainment. To the extent that sports wagering is a bet on who wins a game and by how much, we agree. However, we perceive the integrated opportunity to be qualitatively different. What if you could bet 1:2 on whether Giannis will make the next free throw, 1:3 on whether Jacob deGrom’s next pitch will be a strike or 20:1 that Aaron Judge will homer on the next at bat? One could even bet on whether Tiger will make his next putt or whether Nadal’s next serve will be an ace. Suddenly, watching sports goes from being a passive experience to a highly engaging, active one. Higher engagement leads to higher ad revenues and the ability to make other in-app sales to players. We expect the software to launch in 2021, initially for play money and later with the benefit of regulatory licenses for real money. We think the right comparison will be to video gaming companies such as Take-Two Interactive Software or Activision Blizzard rather than other over-the-top (OTT) video providers."

Earlier this month, we published an article revealing Sahm Adrangi Kerrisdale Capital's short thesis on FuboTV Inc. (NYSE:FUBO) stock.

Our calculations showed that FuboTV Inc. (NYSE:FUBO) isn't ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds' poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

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Disclosure: None. This article is originally published at Insider Monkey.