FuboTV Face Law Suit Over Falsehoods Including Sports Betting Claims

A class action case has become the target of FuboTV, an American online television service mainly focused on live sports including NFL, MLB, NBA, NHL, MLS and international soccer.

In a statement, New York law firm Wolf Haldenstein Adler Freeman & Herz LLP reported that the federal securities class action lawsuit was filed in the United States District Court for the Southern District of New York on behalf of investors who, from 23 March 2020 and 4 January 2021, purchased or otherwise acquired common stock of fuboTV Inc.

Misleading statements

The filed lawsuit claims that defendants made significantly false and/or misleading statements during the class period. It is also alleged that it was not realistic to announce to investors that Fubo’s subscriber growth and profitability were unsustainable after the one-time seasonal surge, or that its product offering would be subject to cost escalation.

Fubo is also accused of failing to report that it could not compete and operate effectively as a sportsbook operator and could not build on its online sports wagering potential.

Overstated valuation

In addition, the accusers claim that the data and inventory of Fubo were not differentiated to allow it to achieve its long-term advertising growth goals and that, given its overall revenue and subscription levels, its valuation was overstated.

Finally, the acquisition of California-based tech startup Balto Sports is alleged to have failed to provide the claimed synergies and internal expertise and to extend the addressable market of the business into sports wagering.

‘Pure fantasy’

Wolf Haldenstein Adler Freeman & Herz LLP cited the views of Lightshed Partners analyst Richard Greenfield, who launched Fubo coverage with a selling recommendation and a one-year price target of $8 on December 23, 2020. Lightshed called prospects for Fubo to achieve success with sports betting a ‘pure fantasy’ in connection with initiating coverage.

On this news, Fubo’s shares decreased $11.90 or 21.22 percent over two days to close on December 24, 2020 at $44.18.

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