YouTube is to Video as Roblox is to Gaming, with Music Having a Starring Role in Both

The COVID-19 pandemic has fundamentally changed the way we live, work, interact and entertain ourselves.  As we rapidly adapted to life at a physical distance, technology has replaced critical elements of the real world.  Almost as soon as lockdowns began in March 2020, the video game ecosystem not only surged in engagement, but took attention away from other forms of media.  It is not just that “gamers” have more time on their hands; established gamers and new players have sought … Continue reading YouTube is to Video as Roblox is to Gaming, with Music Having a Starring Role in Both

Nine Questions For Verizon’s Q4 Earnings Call Tomorrow Morning

Ahead of Verizon’s Q4 2020 earnings call tomorrow morning we wanted to lay out nine questions investors should be asking management as we enter 2021. 1. What Is The 3-year Capital Budget? We expect Verizon to be the leading buyer of spectrum in the C-Band spectrum auction, adding 100 MHz to its existing 133 MHz sub-6 GHz spectrum position. We believe this could trigger a new multi-year capital investment cycle into Verizon’s macro tower network. However, it’s unclear if Verizon … Continue reading Nine Questions For Verizon’s Q4 Earnings Call Tomorrow Morning

Nine Questions for Netflix’s Q4 2020 Earnings Interview Tonight

After a dramatic surge in Netflix’s stock price in 1H 2020, shares have been effectively stuck at the ~$500 level over the past six months. The recent underperformance has largely been driven by fears of a COVID-19 pull-forward creating challenging comps for 2021 and rising concerns about intensifying streaming competition. While there is little doubt that the pandemic pulled forward sub growth, more importantly, it accelerated the industry shift to streaming television and movies – a meaningful positive for our … Continue reading Nine Questions for Netflix’s Q4 2020 Earnings Interview Tonight

Lowering Fubo Target to $6.50 as Sports Betting Fantasy Dilutes Shareholders

We are lowering our one-year target price on Fubo to $6.50 from $8 and maintaining our SELL rating, based on a 7.5x multiple of 2025 advertising contribution margin discounted back at 15% for four years.  The change from our prior target is based on the assumption that Fubo will need to raise at least $1 billion of equity in 2021 to finance its sports betting fantasy. When we initiated with a SELL rating on FUBO in December 2020 (link), we … Continue reading Lowering Fubo Target to $6.50 as Sports Betting Fantasy Dilutes Shareholders

LightShed’s Top 21 TMT Predictions and Events to Watch for in 2021 #Top21for21

Happy New Year and good riddance to 2020. As always, we are kicking off TMT coverage in the new year by laying out our top predictions and events to watch for in 2021 – what we call our #Top21for21. To see what we got right and wrong in last year’s Top 20 list for 2020, it can be found here. It is safe to say the world changed more in 2020 than in any other year in our lifetimes. TMT was at the … Continue reading LightShed’s Top 21 TMT Predictions and Events to Watch for in 2021 #Top21for21

Upgrading Disney to Neutral; We Were Wrong

In early May, we downgraded Disney to SELL (link). Our call has been dead wrong. At the time we focused on how the market under-appreciated the impact of COVID-19 on fiscal (September) 2020-2021 earnings. We knew numbers needed to come down significantly and expected the stock to follow, especially as leverage far exceeded historical norms. However, even 25 years into our analyst career, the market is still teaching us new lessons. Shortly after our call, the market (including Disney investors) … Continue reading Upgrading Disney to Neutral; We Were Wrong

Why the vMVPD Biz Model is Broken

As it turns out, vMVPD’s really did not offer much of a fresh start for the multichannel video industry. As these services emerged, the hope was to offer consumers better price / value bundles by starting the channel offerings from scratch. For the most part, that hope is gone and vMVPDs are looking more like their predecessors, albeit with better interfaces/features, less RSNs and the ability for consumers to cancel (churn) at anytime. Cable network owners (programmers) have ensured that … Continue reading Why the vMVPD Biz Model is Broken

The 5 Reasons To Own Tower Stocks In 2021

Happy New Year! We had a lot to say about tower stocks in 2020, but stopped short of making formal recommendations as valuations rose quickly following the approval of T-Mobile’s acquisition of Sprint which, in turn, triggered overly optimistic domestic growth expectations. The end of year sell-off in tower stocks and digestion of higher than expected Sprint churn offers us an opportunity to recommend what we have always viewed as an incredible business model that appeals to a broad investor … Continue reading The 5 Reasons To Own Tower Stocks In 2021

Radius: A New Kind Of 5G Infrastructure Play. Initiate With Buy

Radius Global is a new type of wireless infrastructure investment opportunity. It owns the property under wireless towers and generates tower-like revenue escalators. Radius pays no taxes because it’s still in the early stages of consolidating a global portfolio of assets, but we believe REIT status is inevitable. Management is top notch. The $13 stock values the company at a $1 billion market cap with an additional $450 million of net debt. We think it will be worth $21 by … Continue reading Radius: A New Kind Of 5G Infrastructure Play. Initiate With Buy

FuboTV is a Money Losing vMVPD, FuboTV is not Roku nor FanDuel; Sell Now

Over the past 20 years, the multichannel video business has gone from a great high margin business to an awful one. The industry incumbents are still there mostly for bundling benefits, and virtual MVPDs without other strategic objectives have pulled back. Since the first vMVPD launched in 2015 (Sling), many have entered the space, but the end result is the same: little-to-no profitability regardless of scale, largely undifferentiated product offerings and no leverage vs. content owners that have must-have programming … Continue reading FuboTV is a Money Losing vMVPD, FuboTV is not Roku nor FanDuel; Sell Now