FuboTV Stock Is Plunging: What's Going On?

FuboTV Inc FUBO shares are tumbling Wednesday following a joint venture deal between multiple media giants.

What To Know: Disney’s ESPN, Warner Bros Discovery and Fox reached an understanding on principal terms to form a new joint venture to launch a sports streaming service in the fall.

The platform will be made available directly to consumers through a new app. The name and price of the new streaming service has not been announced.

The deal is particularly bad for sports-focused FuboTV, which aims to offer the best premium sports, news and entertainment content in a single app.

Following the announcement, Needham analyst Laura Martin noted that Fubo is “probably the most injured by this new competitor.”

Cantor Fitzgerald analyst Brett Knoblauch also weighed in on the deal, calling it a “negative development” for Fubo.

Fubo currently offers access to a majority of the content available through the Disney and Fox family of networks, but it doesn’t provide access to Warner Bros networks.

“This new joint venture could effectively replicate much of what FUBO has to offer,” the analyst said in a new note to clients.

Knoblauch noted that the pricing of the deal is what really matters for Fubo. If the new offering is priced competitively to Fubo, the analyst sees potential for increased churn, which could force the company to ramp marketing spend to try to acquire incremental subscribers.

“Furthermore, one also has to consider why one (or all three) decided to start a new joint venture rather than acquire the likes of FUBO,” the analyst said.

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FUBO Price Action: Fubo shares were down 27.5% at $1.825 Wednesday morning, according to Benzinga Pro.

Photo: courtesy of FuboTV.