What happened

Shares of fuboTV (NYSE:FUBO) have been on a bit of a rollercoaster ride, and today continues the downhill drop. As of 10:15 a.m. EST Thursday, the stock was down another 9%, bringing its two-day cumulative drop to 23%. 

But investors who have owned it for more than a week shouldn't be complaining, as they are still up over 80% on the newly public company. 

So what

The sports-focused streaming service went public through an initial public offering (IPO) on Oct. 8, and shares had been on a tear until yesterday. There are several explanations for the reversal. 

man cheering streaming soccer on big screen tv

Image source: Getty Images.

FuboTV was one of the lesser-known streaming services until the stock went public, and management began increasing visibility to investors. The company had only slightly more than 300,000 subscribers in 2019. 

But the company made a splash with investors earlier this month when it announced it would acquire online fantasy sports tool developer Balto Sports as a "first step into [the] sports wagering market." 

Now what

The online sports betting sector is hot right now, and that helps explain the huge move in fuboTV's share price. But sometimes a sharp rise like that leads investors to decide to cash in. An analyst downgrade yesterday based on valuation concerns started the share price reversal. 

But streaming TV and online sports betting are both gaining consumer engagement. The company said it was up to 455,000 paid subscribers as of the quarter ended Sept. 30, representing a 58% gain over the prior year period. 

The business is strong, and if researching the stock gives you confidence in owning shares, ignore the volatility or take advantage of drops that aren't related to business fundamentals. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.