Famed ‘Big Short’ investor Steve Eisman has delivered a critical assessment of Fox Corporation’s (NASDAQ:FOXA) (NASDAQ:FOX) massive $22 billion acquisition of streaming giant Roku Inc. (NASDAQ:ROKU), offering a sarcastic “good luck” to the media giant over the deal’s sky-high financial metrics.
The Valuation Disconnect
Speaking on his weekly podcast, the Big Short investor highlighted a glaring valuation mismatch that left institutional investors reeling. Eisman noted that the market was “not amused” by the transactional math driving the media consolidation.
“Fox has a 2026 PE of 10 times and it is valuing Roku at a 2026 PE of 57 times,” Eisman detailed during his broadcast. “Good luck.”
Eisman pointed out that Fox currently possesses “little streaming presence,” making this an aggressive, high-priced gambit to rapidly rewrite its digital footprint.
A $22 Billion Power Grab
Under the terms of the deal, Fox will absorb Roku in a cash-and-stock transaction, paying Roku shareholders $160 per share ($96 in cash and 0.9693 shares of Fox Class A common stock).
The merger is designed to unite Fox’s live sports, news, and entertainment portfolios—including its existing ad-supported platform, Tubi—with Roku’s massive distribution network.
The combination will provide Fox direct access to Roku’s ecosystem, which currently reaches more than 100 million streaming households worldwide. On a pro forma basis, the merged entity is projected to become the third-largest player in U.S. television by total share of viewing.
Roku’s founder and CEO, Anthony Wood, is slated to join the Fox board of directors once the transaction concludes.
Despite Fox management forecasting roughly $400 million in annualized cost synergies and expecting the deal to become accretive to free cash flow by the second full year, prominent critics like Eisman remain unconvinced that the strategic premium justifies a steep 57x multiple. The transaction is scheduled to close in the first half of calendar year 2027.
How Have FOX And ROKU Performed In 2026?
Shares of FOX have declined by 27.69% year-to-date. It closed 0.47% higher at $46.95 apiece on Thursday, and rose 1.28% in after-hours.
Over the last month, FOX stock was down 20.41%, and it fell 25.96% over the last six months; the stock was 6.51% lower over the year. Benzinga’s Edge Stock Rankings indicate that FOX maintains a weak price trend in the short, long, and medium terms, with a good value score.
Meanwhile, ROKU gained 27.27% YTD, 11.21% over the month, and 69.56% over the year. It rose 0.57% to $138.07 apiece on Thursday and fell 0.14% in after-hours. Benzinga’s Edge Stock Rankings indicate that ROKU maintains a strong price trend in the short, long, and medium terms, with a solid growth score.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image via Shutterstock
Login to comment