Revenue Climbs but Losses Weigh on Investors (Image Credits: Unsplash)
FuboTV Inc. disclosed robust revenue figures for its fiscal first-quarter 2026 while unveiling plans for a reverse stock split, a move that triggered a steep decline in its share price during Tuesday’s trading session.
Revenue Climbs but Losses Weigh on Investors
The sports streaming platform posted revenue of $1.543 billion for the quarter ended December 31, marking a 40% increase from the prior year. This growth highlighted the company’s expanding subscriber base and operational momentum. Still, FuboTV recorded a net loss of $19.1 million, with earnings per share at negative 2 cents. Investors reacted swiftly to the shortfall, driving shares down 25% to approximately $1.71 each.
The results came roughly a year after FuboTV struck a transformative deal with The Walt Disney Company. Disney agreed to acquire a 70% stake and integrate the service with Hulu + Live TV, while FuboTV retained its public status. Market enthusiasm for that partnership has faded, contributing to prolonged share price pressure.
The Mechanics of a Reverse Stock Split
Reverse stock splits differ markedly from traditional splits. Companies pursuing a standard split increase the number of shares outstanding, typically halving the price per share to attract more retail buyers. FuboTV opted for the inverse approach, consolidating shares to elevate the per-share value.
For instance, in a 1-for-10 reverse split, every 10 shares merge into one, multiplying the price by 10. This strategy often signals efforts to meet exchange listing requirements. FuboTV’s board authorized such a consolidation without specifying the exact ratio yet.
Strategic Reasons and Delisting Concerns
FuboTV stated the reverse split aims to broaden investor access and better match its share count to the company’s scale. Exchange rules play a key role here. The New York Stock Exchange, like Nasdaq, mandates a minimum $1 share price; prolonged sub-$1 trading invites delisting proceedings.
Recent lows for FuboTV reached $1.57 over the past year. A further 40% drop from current levels would breach that threshold. Other firms have turned to similar tactics:
- Lucid Group executed a 1-for-10 split to avert Nasdaq delisting.
- ChargePoint Holdings applied a 1-for-20 ratio amid NYSE pressures.
- Nikola and Virgin Galactic Holdings followed suit for compliance.
Projected Price Effects and Timeline
The company outlined a potential 1-for-8 to 1-for-12 ratio. At the prevailing $1.71 price, this adjustment would lift shares into a safer range.
| Ratio | Projected Price |
|---|---|
| 1-for-8 | $13.68 |
| 1-for-12 | $20.52 |
Trading on the adjusted basis will commence later this fiscal quarter, ending in late March. The board will finalize the ratio closer to implementation. FuboTV shared these details in its earnings release.
Key Takeaways
- FuboTV’s Q1 revenue rose 40% to $1.543 billion, though net losses totaled $19.1 million.
- A reverse split in the 1-for-8 to 1-for-12 range targets listing compliance and investor appeal.
- Shares must stay above $1 on the NYSE to avoid delisting risks.
FuboTV’s reverse split underscores the tightrope streamers walk between growth and financial stability in a competitive market. What implications do you see for its Disney partnership? Share your thoughts in the comments.
