Streaming Service Clash: Buy Netflix, Short FuboTV Pair Trade

Summary

• Netflix stock has had nothing short of a rocky ride during 2022, being down over 70% since January 1st.
• Netflix forecasts weaker growth and a slowdown in subscriptions next Q, however, have investors overreacted?
• Fundamentals of NFLX have greatly cooled down since pandemic peaks, allowing for prospective investors to swoop in on valuations not seen for nearly a decade.
• Both fuboTV and Netflix offer services that are far from necessities, so a recession can offer adverse impacts due to consumers cutting down on spending.
• I will return to my previous fuboTV thesis and add some insightful recommendations on why I think it can continue experiencing headwinds and downgrade it from a Hold --> Sell.

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Introduction and Investment Thesis

In a world of rapidly spreading entertainment services in the form of streaming platforms, the market share of this industry has substantially tightened. It seems that everywhere you look, there is a new streaming

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in NFLX over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

This article is purely my opinion, and prospective investors should conduct further research to make a conclusive decision.