February 2, 2021
Last week was a wild ride on Wall Street with Reddit's /r/WallStreetBets pushing GameStop toward bubbly heights. Before you get confused: No, this is not an investment newsletter. But the emergence of meme stock betting by retail investors could have an impact on cord-cutters in some interesting ways.
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Streamer's Spotlight: Can Meme Stocks Impact Cord-Cutting?
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If you've been following Wall Street news last week, you'd have seen GameStop and Reddit trending. Retail investors (e.g., average Joes like you and me) decided to create a short squeeze on some heavily shorted stocks, including GameStop and AMC. This could be the start of trend, which the SEC is currently powerless to stop. And that trend could make its way into cord-cutting.
FuboTV and Viacom Have Short Interests
Short selling exists when investors (hedge funds, mostly) earn a profit from borrowing, selling, and then rebuying stocks. They profit when those securities go down in price, and pocket the difference when they rebuy the stock. But their focus is primarily on businesses that they believe aren't doing well.
At present, there are two with heavy short interests in the streaming market: FuboTV and ViacomCBS (which owns CBS All Access, soon to be Paramount+).
FuboTV's short interest is particularly bad, at 78% as of this time of writing. And ViacomCBS, at 22%, is still within the top 70 stocks with high short interest on NYSE or Nasdaq.
What Does That Mean, Exactly?
For fuboTV, that could be good or bad news, depending on whether people turn their attention to it for a short squeeze. FuboTV is just under GameStop and AMC in short interest. Once the short squeeze for those two has been exhausted, it could be next on the block for getting shorted...and short squeezed.
That's potentially good news for fuboTV, as it would drive the stock price high. FuboTV could use that capital investment to its advantage. The company could sell its own stock for a profit, then buy back shares later when the prices fall. Considering fuboTV is operating at a loss, that kind of cash infusion would be beneficial.
AMC, for its part, has certainly used this to shore up its debt issues. FuboTV and ViacomCBS may also find ways to use potential short squeezes, as well.
How Does that Impact Cord-Cutting?
When streaming services and media companies have more money to work with, they're more likely to provide better services. Given the traditionally small margins fuboTV and its competitors work with, Stock memeing could produce some interesting results for streaming services, should those short squeezes come our way.
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This Week's Streaming Guide
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1. Host of Originals Coming to Discovery+ TODAY
Discovey+ is getting a dump of new content today, including Mexico Life, Hawaii Life, and Island Life. - Watch on Discovery+
2. Get a Laugh with Super Bowl Commercials
Pre-game the Superbowl with a walk down memory lane. Watch Super Bowl Greatest Commercials on CBS this Wednesday, Feb. 3 at 8 PM EST. - Watch CBS Without Cable
3. Get Ready to Laugh: Impractical Jokers Season 9
They're back for more antics. Impractical Jokers Season 9 premieres on TruTV at 10 PM EST. - Watch TruTV Without Cable
4. Super Bowl LV Coming Your Way
The wait is over: Super Bowl LV starts at 6 PM EST on CBS. - Watch CBS Without Cable
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News and Industry Developments
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1. FuboTV Stock Falls
There are already signs that fuboTV may be a target for retail investors looking to create a short squeeze. - Motley Fool
2. Here's What's On Disney+ Star at Launch
Disney+ Star launches February 23. Here's what it'll have once it's available. - Bad Feeling
3. ICYMI: Philo Adds 24/7 Weather Channel
This is a first for Philo, which previously had no weather channels and offers no local networks where weather is commonly broadcast. - Cord Cutters News
4. Sinclair Dropping "Fox" Branding for "Ballys"
In an effort to shake things up, Sinclair Broadcasting is giving its RSNs a name change, and more. - Awful Announcing
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