FuboTV, Inc. (FUBO) Misled Shareholders About Multiple Facets of Its Business Operations and Performance Metrics
During the class period, defendants made false and misleading statements regarding Fubo’s business operations and performance metrics. Specifically, defendants made false and/or misleading statements and failed to disclose to investors that: (i) FuboTV’s growth in subscriber and profitability were unsustainable past the seasonal surge in subscription levels; (ii) FuboTV’s offering of products was subject to undisclosed cost escalations; (iii) FuboTV could not successfully compete and perform as sports book operators and could not capitalize on its only sports wagering opportunity; (iv) FuboTV’s data inventory was not differentiated to allow FuboTV to achieve long-term advertising goals and forecasts; (v) FuboTV’s valuation was overstated in light of its total revenue and subscription levels; (vi) the acquisition of Balto Sport did not provide the related synergies or internal expertise, and did not expand the Company’s addressable market into online sports wagering.
Between December 23, 2020 and January 4, 2021, FuboTV experienced a massive decline in its stock price when: (i) Lightshed Partners’ criticized FuboTV’s plan to achieve success with sports betting; (ii) multiple analysts downgraded FuboTV stock; (iii) Kerrisdale Capital issued a scathing report, which dismantled all aspects of FuboTV’s business model and exposed the Company’s flawed strategy as “structurally unprofitable; and (iv) Motley Fool reported that FuboTV is “nowhere near close to turning a profit” as “direct costs of delivering its service are higher than revenue.” In all, FuboTV stock declined 54% to close at $24.24 on January 4, 2021.
