FuboTV Shares Soaring After Venu Sports Legal Win, but There’s a Catch

FuboTV is still riding high—at least on the stock market—as the high-profile Venu Sports legal battle remains in a holding pattern.

In the first full day of trading following a federal judge placing a preliminary injunction against the debut of Venu Sports—the streaming alliance involving Disney, Fox, and Warner Bros. Discovery—FuboTV shares closed up by 17.6% at $1.80 per share. 

The sizable increase added to a separate 17% jump Friday in the immediate hours following the ruling. Earlier in Monday’s trading, FuboTV shares were up by more than 40%. The market activity is happening as Venu Sports is expected to soon contest the injunction ruling. Already, the three companies vowed to appeal in a joint statement. 

On the Other Side

Despite the serious legal broadside to Venu Sports from the preliminary injunction—one that could ultimately imperil the service—the stocks of Disney, Fox, and WBD seemingly were not all impacted on the stock market by the ruling. Shares in WBD ended Monday’s trading up by 3%, while Disney stock was up by 1.7%, and shares in Fox rose by 0.4%. 

A key reason for the apparent disconnect is that Venu Sports is not a particularly large entity in the context of the three media giants—despite the significant industry focus on the service. Each of those companies generates hefty quarterly revenue, ranging from Fox’s $3.1 billion to Disney’s $23.2 billion. 

Venu Sports, conversely, carries at least one notable projection of reaching five million subscribers by 2029. If that rather modest goal is achieved at the service’s introductory rate of $42.99 per month, that would generate less than $650 million in revenue per quarter—a sum that would be shared among the three companies. 

Big Stakes

For FuboTV, however, the stakes in the Venu Sports antitrust dispute remain rather dire, and executives said the survival of the company is at stake. Even with the recent run-up in shares, the stock is still down by nearly 43% for the year.

Some analysts, meanwhile, caution that FuboTV’s surge over the past two days could be an illusion. Seaport Research downgraded FuboTV on Monday to a neutral rating after five months of a buy rating.

“With no change in estimates at this point, and with company guidance indicating their subscriber projections do not reflect the potential impact of Venu operating in the market, we think shares are largely driven by the legal process at this point, including appeals,” the firm wrote in a note to clients.