FuboTV Inc. (NYSE: FUBO) closed Friday at $11.25, capping a weekly gain of 9.2% despite a 2.9% pullback on the final trading day. While the price movement is notable, the underlying capital structure tells a more complex story that investors should understand before drawing conclusions about the company's worth.
Understanding the Unusual Share Structure
Fubo's share count is far from ordinary. As of July 31, the company had 30.2 million publicly traded Class A shares. However, Hulu, a subsidiary of The Walt Disney Company (NYSE: DIS), holds 79.0 million Newco units paired with Class B shares. These units are exchangeable one-for-one into Class A stock, according to Fubo's latest SEC filing.
This structure stems from last year's Hulu + Live TV combination, which utilized an "Up-C" entity. Hulu received a 70% economic interest in the operating company, while public Fubo investors retained the remaining 30%. Voting power is split similarly, with Hulu holding Class B shares that carry 70% of the votes but no direct economic rights.
The Valuation Math
At Friday's closing price, the fully converted equity—combining both public and Hulu-held units—amounts to approximately $1.23 billion. In contrast, the public float alone is worth only about $340 million. This discrepancy is critical for valuation purposes.
Adding both economic blocks results in 109.2 million converted units, roughly 3.6 times the listed Class A count. This also affects earnings multiples. As of June 30, Fubo had $322.5 million in debt principal and $236.4 million in cash and restricted cash, leaving net debt of about $86 million.
The look-through enterprise value, calculated as converted equity plus debt minus cash, stands at approximately $1.315 billion. Against management's fiscal 2026 adjusted EBITDA guidance midpoint of $95 million, this implies a multiple of 13.8 times. However, against the fiscal 2028 target of at least $300 million, the multiple drops to a more attractive 4.4 times.
Mixed Operating Performance
Fubo's recent results present a mixed picture. Third-quarter revenue reached $1.482 billion, nearly flat compared with the combined business a year earlier. North American subscribers grew 2% to 5.75 million. However, adjusted EBITDA fell to $19.1 million from $31.0 million in the comparable period, as subscriber-related expenses rose to $1.365 billion.
Management is pursuing growth through advertising and packaging initiatives. CEO Alisa Bowen cited "encouraging improvements in advertising capacity utilization and CPMs" following the Disney Advertising integration. The company also plans more flexible programming bundles to improve retention, though sports rights costs remain a significant headwind.
Balance Sheet and Risks
Fubo's balance sheet provides some breathing room. The $177.5 million convertible notes mature in February 2029, and a separate $145 million Disney note comes due in January 2031. However, the company faces execution risks in achieving its profit targets while content costs escalate.
Short interest is notably high at 24.69% of the public float as of August 14, according to MarketBeat's FINRA-sourced data. This could amplify both rallies and selloffs. Additionally, Disney's 24-month transfer lockup on its Hulu units expires after October 29, 2027, potentially creating a supply overhang.
Investors should focus on the $1.23 billion fully converted equity figure rather than the $340 million public float alone. With U.S. markets closed for Labor Day weekend, the next test comes Tuesday when trading resumes.
