FOX (NASDAQ:FOXA) Shares Gap Down - Should You Sell?

Key Points

• FOX shares gapped down sharply after news of a proposed $22 billion acquisition of Roku, with the stock falling about 16.9% and trading well below its prior close. Investors appear concerned the company may be overpaying for the deal.
• The transaction would combine Fox’s live sports, news, and Tubi assets with Roku’s connected-TV platform, and Fox said shareholders would own about 73% of the combined company. Fox plans to pay $160 per Roku share, split between cash and Fox stock.
• The deal is already drawing scrutiny, including a law firm investigation into whether Fox shareholders are getting a fair price. That legal and shareholder pushback adds another layer of risk as the market weighs the acquisition.

Fox Corporation (NASDAQ:FOXA - Get Free Report)'s stock price gapped down before the market opened on Monday . The stock had previously closed at $65.85, but opened at $56.98. FOX shares last traded at $53.9360, with a volume of 5,210,751 shares trading hands.

Trending Headlines about FOX

Here are the key news stories impacting FOX this week:

• Positive Sentiment: The deal could strengthen Fox’s long-term streaming and ad-tech strategy by combining its live sports, news, and Tubi assets with Roku’s connected-TV platform and audience reach. Fox to buy streaming device maker Roku for $22 billion
• Neutral Sentiment: Fox agreed to pay $160 per Roku share, including $96 in cash and 0.9693 Fox Class A shares, and said Fox shareholders would own about 73% of the combined company. Fox Corp to acquire Roku in $22B deal
• Negative Sentiment: Investors are reacting negatively to the size of the purchase, with reports calling it a “worst day on record” type move for Fox stock as the market questions whether the company is overpaying for Roku. Fox Stock Eyes Worst Day on Record After Buyout News
• Negative Sentiment: A law firm is already investigating whether Fox shareholders are receiving a fair price in the transaction, adding another overhang as the market assesses deal risk and potential shareholder pushback. FOXA, FOX Stock Alert: Halper Sadeh LLC is Investigating Whether Fox Corporation is Obtaining a Fair Price for its Shareholders

Analysts Set New Price Targets

Several research firms recently issued reports on FOXA. Weiss Ratings reissued a "buy (b-)" rating on shares of FOX in a research note on Friday, May 22nd. Argus raised FOX to a "hold" rating in a research note on Thursday, February 19th. Evercore set a $73.00 target price on FOX in a research note on Tuesday, May 12th. JPMorgan Chase & Co. raised their target price on FOX from $69.00 to $70.00 and gave the stock a "neutral" rating in a research note on Tuesday, May 12th. Finally, UBS Group reissued a "neutral" rating on shares of FOX in a research note on Monday. One research analyst has rated the stock with a Strong Buy rating, six have given a Buy rating, nine have given a Hold rating and one has assigned a Sell rating to the company. According to MarketBeat, FOX has an average rating of "Hold" and an average price target of $74.86.

FOX Stock Down 16.9%

The company has a quick ratio of 2.65, a current ratio of 2.90 and a debt-to-equity ratio of 0.60. The company's fifty day simple moving average is $64.19 and its 200 day simple moving average is $65.19. The firm has a market capitalization of $23.00 billion, a PE ratio of 14.56, a price-to-earnings-growth ratio of 3.42 and a beta of 0.51.

FOX (NASDAQ:FOXA - Get Free Report) last issued its quarterly earnings data on Monday, May 11th. The company reported $1.32 EPS for the quarter, topping the consensus estimate of $1.02 by $0.30. FOX had a net margin of 10.56% and a return on equity of 18.90%. The business had revenue of $3.99 billion during the quarter, compared to analyst estimates of $3.78 billion. During the same period last year, the business posted $1.10 earnings per share. FOX's quarterly revenue was down 8.6% compared to the same quarter last year. Analysts anticipate that Fox Corporation will post 4.93 earnings per share for the current fiscal year.

Hedge Funds Weigh In On FOX

Several large investors have recently made changes to their positions in FOXA. Geneos Wealth Management Inc. lifted its holdings in shares of FOX by 205.6% during the first quarter. Geneos Wealth Management Inc. now owns 923 shares of the company's stock valued at $52,000 after purchasing an additional 621 shares during the last quarter. EverSource Wealth Advisors LLC lifted its holdings in shares of FOX by 286.4% during the second quarter. EverSource Wealth Advisors LLC now owns 1,368 shares of the company's stock valued at $77,000 after purchasing an additional 1,014 shares during the last quarter. Baird Financial Group Inc. lifted its holdings in shares of FOX by 19.7% during the second quarter. Baird Financial Group Inc. now owns 17,500 shares of the company's stock valued at $981,000 after purchasing an additional 2,876 shares during the last quarter. California State Teachers Retirement System lifted its holdings in shares of FOX by 16.6% during the second quarter. California State Teachers Retirement System now owns 350,844 shares of the company's stock valued at $19,661,000 after purchasing an additional 49,963 shares during the last quarter. Finally, Ameriprise Financial Inc. lifted its holdings in shares of FOX by 72.0% during the second quarter. Ameriprise Financial Inc. now owns 1,821,284 shares of the company's stock valued at $101,948,000 after purchasing an additional 762,645 shares during the last quarter. 52.52% of the stock is currently owned by hedge funds and other institutional investors.

About FOX

Fox Corporation NASDAQ: FOXA is a U.S.-based media company focused on television broadcasting, cable news and sports programming, and digital distribution. The company was formed in 2019 as the successor to certain assets of 21st Century Fox after a transaction that transferred many film and television studio assets to The Walt Disney Company. Fox Corp's operations center on the Fox Broadcasting network, a portfolio of local television stations, national news and business cable networks, and sports media properties.

Fox produces, acquires and distributes a range of live and recorded programming, including news, opinion and commentary, national and local sports telecasts, and general entertainment.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.