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Why Roku Stock Suddenly Jumped on Wednesday

By Anders Bylund - Jun 30, 2021 at 3:52PM

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The media-streaming expert just put an Apple-sponsored button on its remote controls.

What happened

Shares of Roku (ROKU -6.78%) had a nice, quiet day for most of Wednesday's trading session. But then the stock suddenly shot up as much as 5.1% near 2 p.m. EDT, as investors caught wind of a significant revenue opportunity straight out of Cupertino, California.

So what

Roku did not announce a new deal or partnership today, but the company did publish some updated pictures of the high-end Roku Ultra media-streaming device. The Ultra's new remote has replaced the Sling TV button found on older versions with a new shortcut directly to the Apple TV+ service. This way, Apple (AAPL 0.88%) joins fellow media-industry giants Netflix and Walt Disney on the Roku remote, presumably paying a handsome fee for this premium real estate. The Roku Ultra move is probably the start of updated remote buttons across the company's full portfolio of streaming devices and stand-alone remote upgrades.

Photo of the Ultra and its remote, highlighting the four media sefvice buttons including Apple TV+.

The Roku Ultra with a new Apple TV+ button. Image source: Roku.

Now what

Giving Roku users easy access to a small handful of streaming platforms is a potentially game-changing move, and premium placement on Roku remotes has been a prominent Netflix marketing strategy for years. Apple could certainly use a boost to its ailing Apple TV+ service, which has been available in the Roku store since the fall of 2019 but hasn't delivered mind-blowing subscriber numbers so far. For Roku, Apple is replacing a heavily promoted but rarely used live-TV service from Dish Network. The Apple contract is likely to carry a larger fee than the old Sling TV deal, and that's why Roku investors are getting excited today. At the close, the stock was up 4.3%.

Anders Bylund owns shares of Netflix, Roku, and Walt Disney. The Motley Fool owns shares of and recommends Apple, Netflix, Roku, and Walt Disney. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.

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$78.42 (-6.78%) $-5.70
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