Bireme Capital: “We stay short FUBO”
Bireme Capital, an investment management firm, has released its Q3 2021 letter to investors – a copy of which can be viewed here. A net portfolio return of 9.1% was delivered by the fund for the third quarter of 2021, largely eclipsing the 0.6% return of the S&P 500. You can check out the top 5 holdings of the fund to get an idea of ​​their. top picks for 2021.
Bireme Capital, in its letter to investors for the third quarter of 2021, mentioned fuboTV Inc. (NYSE: FUBO) and discussed his position on the company. fuboTV Inc. is a New York-based streaming company with a market capitalization of $ 4.7 billion. FUBO delivered a 20.57% year-to-date yield, while its 12-month yields are increasing by 126.12%. The stock closed at $ 33.06 per share on November 1, 2021
Here’s what Bireme Capital has to say about fuboTV Inc. in his letter to investors Q3 2021:
“FuboTV, an over-the-top television company, also saw its price plummet from February’s peak, in this case from $ 50 to around $ 26 today. We remain convinced that this case is the classic case of selling a dollar at 90c. The company didn’t even make a gross profit in 2020, with subscriber spend and broadcast costs totaling $ 234 million compared to just $ 218 million in revenue. And since vMVPD content costs tend to increase almost linearly with subscribers, we would expect the business to continue to lose money.
Still, FuboTV’s market cap remains at nearly $ 4 billion, as investors pray that future sports betting on their TV business will somehow stop the tide of red ink. To achieve this, the company may need to raise significant capital as the company recorded an operating cash outflow of $ 149 million in 2020. We remain short of FUBO. “
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Based on our calculations, fuboTV Inc. (NYSE: FUBO) was unable to secure a spot on our list of the 30 most popular stocks among hedge funds. FUBO was listed in 18 hedge fund portfolios at the end of the first half of 2021. fuboTV Inc. (NYSE: FUBO) generated a return of 29.90% over the past 3 months.
The reputation of hedge funds as savvy investors has been tarnished over the past decade, as their hedged returns could not keep up with the unhedged returns of stock indices. Our research has shown that small-cap hedge fund stock selection managed to beat the market by double digits every year between 1999 and 2016, but the margin for outperformance has shrunk in recent years. Nonetheless, we were still able to identify in advance a select group of hedge funds that have outperformed S&P 500 ETFs by 115 percentage points since March 2017 (see details here). We were also able to identify in advance a select group of hedge funds that underperformed the market by 10 percentage points per year between 2006 and 2017. Interestingly, the margin of underperformance of these stocks has increased in recent years. Investors who are long in the market and short on these stocks would have reported more than 27% per year between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
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