Morning Commentary: fuboTV convertible notes price, skyrocket outright in early trading

By Abigail W. Adams

Portland, Me., Jan. 29 – Friday opened with the last new convertible paper of the week entering the secondary space.

fuboTV priced $350 million of five-year convertible notes after the market close on Thursday at par at the midpoint of talk with a coupon of 3.25% and an initial conversion premium of 45%, according to a company news release.

Price talk was for a coupon of 3% to 3.5% and an initial conversion premium of 42.5% to 47.5%, according to a market source.

The new paper skyrocketed on an outright basis as the company’s stock shot up more than 11%.

It traded to a high of 111 shortly after the opening bell and was changing hands at 107 on an outright basis about one hour into the session.

fuboTV’s stock also skyrocketed in early trading on Friday, opening at a high of $45.39.

Stock was changing hands at $43.83, an increase of 9.89%, shortly before 11 a.m. ET.

The new convertibles paper comes from a name in the thick of the drama that has captivated the street over the past week as retail traders go to battle with short-sellers.

The New York-based sports-first live TV streaming platform is a heavily shorted name and a potential target for the retail traders, which one source branded the “Reddit Army.”

The offering was well-received during bookbuilding although there was trepidation that holders who put the name up on hedge would be unable to maintain their borrow if retail traders purposely drove up the price of stock to GameStop levels.

fuboTV has been frequently mentioned in Reddit’s online chatroom WallStreetBets, and the company’s stock has been the source of bullish unusual options activity throughout January.

fuboTV’s stock hit a 52-week high of $62 on Dec. 22 following its fourth-quarter earnings report but tumbled down to close 2020 at $28.

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