Founded by CEO David Gandler in 2015, Fubo heads into the fourth quarter expecting to be at 370,000 to 380,000 subscribers by the end of the year, up more than 28% from 2019 and ahead of initial forecasts. Sports, which have returned after COVID-19-related interruptions, are key to the offering and are credited with spurring subscriber growth. The company says revenue in the third quarter is expected to be $50 million to $54 million.
After the stock offering, Fubo will trade under the ticker symbol “FUBO.” Currently traded over the counter, shares rose 5% Thursday to $9.49.
In an SEC filing, Fubo said it expects to reap between $136.5 million and $157.4 million from the IPO.
Over the course of 2020, Fubo has made a series of moves designed to position it for an IPO and further growth. It brought in Edgar Bronfman Jr., a media investor and former Warner Music CEO and Vivendi Universal head, as executive board chairman. In April, it closed a merger with FaceBank Group, a virtual entertainment specialist focused on sports and celebrity activations.
When it made its debut, Fubo was part of a wave of so-called “skinny bundle” packages — leaner, internet-delivered packages of channels designed to disrupt the pay-TV ecosystem. Pricing, while initially well below what customers pay for cable or satellite hookups, has risen significantly at many companies as their channel offerings have expanded, following the conventional economics of pay-TV.
In July, Fubo raised its basic rate $5 a month, to $60, a little more than a year after hiking it $10. One driver of the higher cost was a carriage deal with Disney, which brought ESPN networks to Fubo. In that same timeframe, the company parted ways with WarnerMedia, unplugging TNT, TBS, Cartoon Network and other channels.
Cord-cutting trends give internet TV bundles a growing target market. AT&T Now, which started out in 2016 as DirecTV Now, has been in retreat over the past year, slipping below 1 million subscribers after initial gains. Dish Network’s Sling has also been sliding, though it remains above 2 million. Hulu with Live TV, at 3.4 million subscribers, is the market leader, and YouTube TV passed 2 million this year. Another player in the space is the more slender, non-sports outlet Philo.
Sony shuttered PlayStation Vue earlier this year, withdrawing from the market it had entered along with Fubo in 2015.