Name: $FOX dropped 25% buying $ROKU. Is the market wrong? | Accrued Interest
Uploaded: 2026-06-28T18:05:20+00:00
Duration: 3650 s

Speakers

Simeon McMillan — Media analyst, Accrued Interest

Andrew Walker — Host, Yet Another Value Blog

Summary

Simeon McMillan of Accrued Interest returns to discuss Fox's $22B acquisition of Roku. He argues the market is wrong to punish Fox because Roku controls the streaming front door, Fox gains distribution and negotiating leverage, and Tubi is an underappreciated FAST asset. He also explains why he is bearish on Spotify and bullish on Google and Meta as true value stocks. Host Andrew Walker pushes back on the deal price and synergies.

Fox agreed to buy Roku for $22B; Fox shares fell about 25%.
Simeon sees Roku as the Strait of Hormuz of US streaming with ~44% big-screen share and ~100M CTVs.
He views the deal as cheap at ~16-17x EV/FCF with synergies and likes Fox's distribution strategy.
Tubi is his most bullish Fox asset, with ~100M MAUs and complementary to Roku Channel.
He is underperform/bearish on Spotify due to audio ARPU ceiling and undifferentiated music.
He calls Google and Meta true value stocks, citing strong ad revenue and contracted multiples.
He is bearish on Nexstar and sees cord cutting/streaming shift as underappreciated.
Andrew Walker questions the premium, low cost synergies, and winner's curse risk for Fox.

Ideas

Simeon McMillan Media analyst, Accrued Interest 5:28

Roku controls streaming's front door; cheap.

Roku is the Strait of Hormuz of US streaming: it controls about 44% of streaming television viewing through big-screen TVs, roughly 3x the next competitor, giving it front-door distribution over about 100 million North American connected TVs. Its monetization levers are underappreciated: a newly redesigned homepage acts like the new Netflix homepage, it historically refused non-media advertising, and ad monetization is just inflecting. Fox is buying it at ~22x EV/FCF on management's 2028 FCF estimate, or ~16-17x with light synergies, which Simeon thinks is cheap for a growing platform.

Simeon McMillan Media analyst, Accrued Interest 6:25

Fox buys distribution, avoids streaming arms race.

Tubi is the Fox asset Simeon is most bullish on. It is a leading free ad-supported streaming service with about 100 million monthly active accounts and 2-3% of big-screen TV viewing, nearly equal to Prime Video. Tubi and Roku Channel are complementary (free on-demand vs. linear FAST), can be sold together to advertisers, triple digital reach, and combined with Fox properties reach roughly Disney's scale. A future Super Bowl could be put on Tubi/Roku.

Simeon McMillan Media analyst, Accrued Interest 7:26

Nexstar weak in lower-tier local TV.

Simeon says he has been bearish on Nexstar, which he associates with the less powerful second- and third-tier local TV markets, while Fox's top-15 market stations are more powerful. Nexstar's CW is described as a distant fifth broadcast network. The view is brief but explicit.

Andrew Walker Host, Yet Another Value Blog 18:06

Fox may be overpaying for Roku.

Andrew pushes back on the Fox-Roku deal for Fox: Fox is paying a big premium ($22B) for Roku, only $400M of cost synergies, the deal was well-shopped, and the winner's curse may apply. Roku's upside is available to any owner, while Fox shareholders lose a pure-play capital-return story. He does not see the bullishness on the Fox side of the merger.

Simeon McMillan Media analyst, Accrued Interest 48:47

Audio caps ARPU; Spotify underperform.

Spotify is audio-first, which creates a ceiling on ARPU because audio ad CPMs are structurally lower and grow more slowly than video. Music is largely undifferentiated across services, so exclusivity is limited and YouTube Music can take share. Labels giving cheaper royalty rates as Spotify adds subscribers makes the relationship less antagonistic, but Simeon remains bearish/underperform on Spotify.

Simeon McMillan Media analyst, Accrued Interest 54:41

Google, Meta cheap true value stocks.

Google and Meta are true value stocks: they have strong, growing cash flow and earnings but are perennially doubted, and their multiples have contracted. AI is helping them deliver ads more effectively, ad impressions are spiking, and pricing remains strong. As long as revenue and profits stay there, eventual pullback in AI/capex spending could drive re-rating. Simeon wants to be on record going long both.

$FOX dropped 25% buying $ROKU. Is the market wrong? | Accrued Interest

Summary

Ideas

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