At $3.25 A Share, Is Now A Good Time To Buy Fubo TV?

I’ve never owned a penny stock. I always thought they were for losers. Penny stocks are for people with hair growing out of their ears. I’d much rather wait until a company has real earnings, or at least real prospects for real earnings, before I invest. But I’m also realizing that if you’d invested $10k in Apple at .38 cents a share in 1988, you’d be wealthy beyond your wildest dreams today. So maybe a little hair coming out of your ears isn’t the worst thing in the world.

Which brings me to Fubo TV. I bought a few shares at $27 nearly a year ago and, like anything you bought nearly a year ago, it hasn’t worked out so well. The reason I bought shares was because a streaming service built around live sports made all the sense in the world. As we all know, live sports is one of the only reasons anyone watches live TV. Everything else can be streamed at your leisure. Fubo TV made a name for itself for being the streaming service of choice for sports fans. At least I think it did. I use YouTubeTV and I’m far too lazy to sign up for Fubo to compare the services. But here’s what I know:

• Fubo  reported an adjusted loss of 57 cents a share in the fourth quarter.
• Revenue of $231 million in the last quarter was ahead of the $213.3 million analysts had expected.
• They finished 2021 with a record 1.13 million total paid subscribers, up 106% from the prior year.
• Fubo is buying streaming services in other parts of the world including France (they already operate in the US, Canada and Spain)
• Last year, Fubo rolled out an online gambling business so you can bet on the sports you’re watching on your TV.
• They’re ranked 3rd in this US News and World Report which isn’t too shabby.

To be fair, Fubo is not likely to catch YouTube TV or Hulu+Live TV (approx 4 million subscribers each) anytime soon. But do they have to?  Wouldn’t YouTube TV or Hulu like to add another million+ subscribers who like to watch and gamble on live sports? At $3.25/share, this feels like a pretty good bet. But that’s exactly what it is, a bet.  Fubo doesn’t have any real earnings. Of course they say it’s because they’re spending so much to acquire new users but who knows if the company will ever reach profitability. If Fubo keeps growing its userbase, they’ll either grow into profitability or, eventually, be acquired. If growth slows or stops, they could pull a Quibi and just close up shop. At $3.25 a share and feeling like a penny stock, it’s the closest I’ll get to truly gambling on something in the market.

Other Stocks I’m Looking At:

Lululemon Athletics (LULU): Still trading for 38x earnings but I’ve always wanted to own shares. Maybe wait a little longer for another big dip but you don’t lose money holding this company for the next decade.

Accenture (ACN): Consultants get a bad name because they come into your business and tell you how to run things which is incredibly annoying, even if they’re right. Still, people seem to like being told what to do especially if it improves profitability.