Roku Slumps After Analyst Notes Coming Comcast and Other Competition
Roku shares closed down 19 percent Friday at $108.05 after a Pivotal Research sell rating, citing competition emerging for over-the-top video devices that will likely drive their cost “to zero,” while squeezing ad revenue. Jeffrey Wlodarczak highlighted Comcast’s Wednesday announcement…
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that it's providing its Xfinity Flex OTT device to customers for free, which is “likely to be copied by other distributors.” The analyst credited Roku for creating the streaming media player market but said “everyone has realized the living room is too important” and companies with “massive leverage,” such as Comcast, are likely to make Roku growth “much more difficult.” Altice, Charter Communications and others that “control the dominant data pipe into the household” are coming up with their own ways to deliver streaming content and integrating it with broadband service, he noted. Roku didn't immediately comment.