FuboTV Inc. (FUBO) saw a significant surge in its stock price on January 7th, closing at $5.46, up 7.91% from the previous close of $5.06. The stock opened at $5.43 and reached an intraday high of $6.45, with a trading volume of 377,625,729 shares, which is 1723.51% of its average volume. This dramatic increase in price and volume was primarily driven by the announcement of a merger with Disney's Hulu+ Live TV. The merger, which grants Disney a 70% ownership stake in the combined entity, is expected to enhance FuboTV's competitive position in the paid TV market by combining the subscriber bases of both services, totaling over 6.2 million. The merger is projected to make FuboTV immediately cash flow positive, with EBITDA estimates between $325 million and $375 million post-merger.
The news of the merger also resolved ongoing litigation with Disney and ESPN, further boosting investor confidence. On social media, particularly Reddit, there was a buzz of excitement over the merger, with users on the r/Shortsqueeze subreddit noting the potential for a short squeeze as shorts scramble to cover their positions. Discussions highlighted the bullish sentiment among retail investors, with some eyeing price targets as high as $20-$22.
Additionally, a report indicated that Wedbush raised FuboTV's price target to $6.40 following the merger news. The merger announcement and the subsequent market reaction reflect a positive outlook for FuboTV, as it positions itself for growth in the competitive streaming market.