Shares of FuboTV jumped 34.2% on Tuesday after the company said it is acquiring sports betting startup firm Vigtory. The live television streaming services provider didn’t disclose the financial terms of the deal.
FuboTV (FUBO) intends to launch a sportsbook by the end of this year by leveraging Vigtory’s sportsbook platform and digital gaming assets. Additionally, the company plans to integrate the sportsbook into its live television streaming platform, to provide FuboTV’s subscribers with a seamless viewing experience.
As a result of the transaction, FuboTV will combine its December 2020 acquired Balto Sports company with Vigtory and launch a free to play sports gaming experience this summer. (See FUBO stock analysis on TipRanks)
FuboTV anticipates the transaction to close in the first quarter of 2021. Upon completion of the deal, Vigtory’s CEO Sam Rattner and co-CEO Scott Butera will join FuboTV’s gaming division as president and COO, respectively.
Following the announcement, Roth Capital analyst Darren Aftahi reiterated a Buy rating on the stock and set a price target of $55 (50.8% upside potential). In a note to investors, Aftahi wrote, “The free to play platform should greatly increase FUBO’s brand awareness as a gaming platform as FUBO could utilize promotions and credits to incentivize users to not only take part in sports betting but possibly “free trials” (or other promotions) to utilize the streaming platform. This should vastly open up its “top of funnel” and act as another lead generator.”
Consensus among analysts is a Moderate Buy based on 6 Buys, 1 Hold and 1 Sell. The average price target of $35.75 implies downside potential of 2% to current levels. Shares have rallied about 272.6% over the past year.
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