Fubo TV (FUBO) shares spiked more than 200% on Monday.
Shares gapped from under $1.50 to more than $5 through the day after the company announced an agreement with Disney (DIS) to drop an antitrust lawsuit against Disney, Fox Entertainment (FOXA) and Warner Bros. Discovery (WBD).
The suit alleged that their new sports streaming service called Venu unfairly blocked FUBO out from offering some of its sports content on the new platform.
Fast forwarding to this past August, FUBO scored a win after a judge granted a preliminary injunction to block Venu's launch as the lawsuit continued, adding that Venu would substantially lessen competition.
Today’s agreement details that FUBO will drop all outstanding litigation related to Venu Sports, thereby paving the way for DIS, FOXA, and WBD to launch their service.
In exchange, those three companies have agreed to pay FUBO $220 million, while DIS also committed to providing FUBO with a $145 million term loan in 2026.
In addition, the agreement also has Disney taking a 70% stake in Fubo TV and agreeing to combine its Hulu + Live TV product with FUBO's sports offerings.
The move has taken Fubo TV from a struggling streaming platform to a sports streaming competitor.
FUBO share are likely to level their performance as buzz from the deal dies down. Investors will start to look to management for guidance on where the company plans to go with the new product along with revenue and earnings guidance.
Fubo TV’s next earnings release is set for February 26. Wall Street analysts expect the company to lose $0.18 per share this quarter, down from losses of $0.08 per shares last quarter.
