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Shares of FuboTV Inc. tumbled Monday after the streaming platform disclosed that it had sold shares at “negotiated discounts” and after it provided “conservative” subscriber guidance due to the size of recent price hikes.
The stock’s selloff marked a sharp reversal from the big gains seen before the opening bell, soon after the company reported a much narrower-than-expected fourth-quarter loss.
The company disclosed in an 8-K filing with the Securities and Exchange Commission that it had sold 36.7 million common shares, which is about 17.5% of the 209.69 million shares outstanding as of Jan. 31, for gross proceeds of $68.1 million.
The shares were sold in block trades to multiple investors under the company’s “at-the-market” program at what it called negotiated discounts. The proceeds imply that the shares were sold at about $1.86 each, which is 19.8% below Friday’s closing price of $2.32.
The stock
FUBO,
dropped 12.9% in morning trading, which puts it on track for the lowest close since Jan. 19.
The stock had jumped as much as 8.1% in premarket trading after the company reported better-than-expected fourth-quarter results but provided what it acknowledged was conservative first-quarter subscriber guidance because of the size and timing of price increases.
The company expects 1.14 million to 1.16 million subscribers in North America and 368,000 to 373,000 in the rest of the world, or a total of 1.508 million to 1.533 million. That compares with total fourth-quarter subscribers of 1.865 million, and with the average first-quarter estimate of two analysts surveyed by FactSet of 1.638 million.
The outlook comes after the company announced a $5 increase for new subscribers on Jan. 6, and after increased prices kicked in for existing subscribers on Feb. 6. That’s on top of price increases for regional sports networks, to about $11 to $14.
Given the size of the price hikes and the fact that it was the first time prices had been increased in the first quarter — prices are typically raised in the third quarter — Chief Executive David Gandler said the company thought it was appropriate to provide “conservative” subscriber guidance.
Meanwhile, the company reported a fourth-quarter net loss attributable to common shareholders that widened to $151.98 million, or 76 cents a share, from $111.96 million, or 76 cents a share, in the same period a year ago. The reason losses per share were flat while losses widened was because the number of shares outstanding increased to 200.13 million from 148.05 million.
Excluding nonrecurring items, per-share losses narrowed to 39 cents from 50 cents.
Revenue jumped 38.2% to $319.2 million as subscription revenue increased 39.1% to $284.9 million and advertising revenue grew 29.7% to $33.9 million.
The FactSet consensus was for losses per share of 71 cents and revenue of $285.6 million.
The stock has tumbled 25.2% over the past three months, while the S&P 500
SPX,
has slipped 0.9%.
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