fuboTV (FUBO  ) made its public debut in October. The company raised $183 million, selling shares at $10 apiece, giving the company a valuation of $620 million.

It was expected to sell 15 million shares between $9 and $11. Due to higher than expected demand, it was able to sell 18.3 million shares. Streaming services have done very well during the pandemic and are expected to continue taking market share away from traditional TV due to cord-cutting.

Company Profile

The streaming marketplace is getting crowded with an overwhelming number of offers. fuboTV attempts to differentiate itself by focusing on live sports in its package. During the coronavirus, it's seen 47% growth and has a total of 286,000 subscribers.

The company was founded in 2015 as a sports-focused streaming service but has added other channels to its package including ABC, Disney Channel, and FX. Before going public, it raised $250 million from an assortment of investors and media companies including AMC Networks (AMCX  ), Walt Disney (DIS  ), and Viacom (VIAC  ).

Given its current valuation, many of the investors in fuboTV's late fundraising rounds are down on their investment. Adding to its challenges, fuboTV faces a competitive landscape and many of its peers have also added sports packages which were its initial competitive advantage.

Last year, fuboTV had revenues of $146.5 million which was a 96% increase from the previous year with a net loss of $129.3 million. In the first half of 2020, it had revenue of $51.5 million with a net loss of $129.9 million. Besides operating costs, its biggest expenses are marketing and the cost of content.

Stock Price Outlook

fuboTV is certainly an interesting business. And, its stock has done remarkably well in its first month of trading with a 40% gain. However, there are some reasons to be skeptical about its long-term potential.

First, the company was able to benefit from the cord-cutting trend and win a share of customers due to its differentiated offering featuring live sports. However, this has now become common with many streamers offering such a package, most notably ESPN+ and Hulu. While this was groundbreaking in 2015, now it's not going to move the needle.

The bigger problem for fuboTV is it's a tiny player in a market dominated by behemoths like Netflix (NFLX  ), Disney, AT&T (T  ), Viacom, and other companies willing to spend billions to win market share by buying exclusive rights to the content. As the cost of content increases, fuboTV's margins will decrease. Additionally, given the competitive environment, they won't have many avenues to raise their prices.