Live-Sports Stock Explodes on Pennsylvania Gaming Expansion

There's a chance a short squeeze could turn FUBO's year around

Assistant Editor
Jul 16, 2021 at 9:55 AM
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The shares of FuboTV (NYSE:FUBO) are surging this morning, up 5.6% to trade at $27.13 ahead of the open. Today's positive price action comes after the streaming staple's Fubo Gaming subsidiary gained market access for its mobile Fubo Sportsbook in Pennsylvania via an agreement with casino operator Cordish Companies. If Fubo obtains the required regulatory approvals, then the agreement will provide for state-wide mobile access for both sports betting and iGaming.

FUBO is underperforming on the charts, down 8.3% year-to-date. The 120-day moving average has put consistent pressure on the equity since mid May, though FuboTV stock did manage to trade above the trendline for a spell in June. Meanwhile, the security is pacing for its third straight weekly loss, and has only turned in one win in 10 sessions.

Despite this lackluster chart performance, analysts are overwhelmingly optimistic on FuboTV stock. Of the eight in coverage, seven carry a "buy" or better rating, while only one says "hold." Plus, the stock's 12-month consensus price target of $39.50 is a healthy 44.6% premium to current levels.

There's also short squeeze potential building, with short interest up 12% in the most recent reporting period. The 25.72 million shares sold short accounts for a hefty 23.4% of FUBO's total available float, and at the stock's average pace of trading, it would take two days for short sellers to buy back their bearish bets.

Today's options activity has accelerated, with 40,000 calls and 6,270 puts across the tape so far -- three times the intraday average. The most popular by far is the July 28 call, where positions are being sold to open, this suggests these traders are eyeing a ceiling for FUBO at the $28 level by the time these contracts expire tonight. 

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