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The U.S. Department of Justice is widening its antitrust inquiry into Fox's (FOXA.O) $22 ​billion deal for streaming platform Roku (ROKU.O), Semafor reported on ‌Tuesday, citing people familiar with the matter.

The DOJ's move comes just months after Fox unveiled the $160 per share deal, which would combine its ​broadcast and sports operations with Roku's streaming reach, making ​the combined company the third-largest player in TV ⁠viewing, behind YouTube and Disney and ahead of Netflix.

Roku shares ​fell about 2% in extended trading after the report.

The DOJ ​plans to seek more information from the companies through what is known as a "second request", involving another round of data and document sharing, ​Semafor added.

Reuters could not immediately verify the report. The ​DOJ, Fox and Roku did not immediately respond to Reuters requests for comment ‌outside ⁠business hours.

Fox said in June it was buying Roku in a cash-and-stock deal, betting the platform would strengthen its advertising business and expand its reach for sports and news content.

The ​deal would give ​Fox access ⁠to the more than 100 million households using Roku's platform, helping the cable TV-reliant company ​build a larger digital audience and reduce its ​reliance ⁠on traditional distribution.

Under the agreement, Roku investors would receive $96 in cash and about 0.97 Fox Class A shares for each share ⁠held, ​valuing the offer at $160 per share.

Fox ​CEO Lachlan Murdoch had earlier downplayed any potential conflict.

Roku surged past Wall Street expectations in the second quarter, with revenue and earnings ahead of analysts’ expectations.

Earnings per share hit $1.08 on a diluted basis, up from 7 cents a share in the year-earlier period. Total revenue climbed 22% to $1.35 billion, paced by a 25% rise in platform revenue driven equally by gains in advertising and subscriptions.

The report is the company’s first since agreeing to be acquired by Fox Corp. in June in a proposed $22 billion deal. The companies expect the transaction to close in the first half of 2027. Citing the deal, Roku elected not to convene an earnings conference call.

In their quarterly shareholder letter, CEO Anthony Wood and CFO and COO Dan Jedda said the platform revenue increase was largely due to the first major overhaul of the Roku home screen in more than a decade. Unveiled last May, the new interface completed its rollout in the third quarter, with international markets set to unveil it in the coming months.

The new experience “is designed to maximize content discovery and personalization for our viewers,” the execs wrote, “while simultaneously delivering benefits to our content partners and advertisers, and growing platform monetization.”

Results thus far have been “encouraging,” the letter said. “For example, our new home screen improved our ability to retain households in the U.S., resulting in more users we can serve and thus reducing overall costs to grow streaming households.”

While advertising continues to be one of the bedrock elements of Roku’s business model, the company has been ramping up its ability to make money by enabling subscriptions to dozens of streaming services in the U.S. During the quarter, it added Peacock’s ad-free tier to its premium subscriptions hub, where Apple TV debuted earlier in the year.

Wood and Jedda in the letter called the Fox acquisition “an extraordinary opportunity to accelerate our vision, allowing us to scale faster and innovate more aggressively for viewers, partners, and advertisers.”

Roku (ROKU - Free Report) closed at $142.34 in the latest trading session, marking a +1.17% move from the prior day. This change outpaced the S&P 500's 0.79% loss on the day. Meanwhile, the Dow lost 0.26%, and the Nasdaq, a tech-heavy index, lost 1.55%.

The video streaming company's stock has dropped by 2.07% in the past month, falling short of the Consumer Discretionary sector's gain of 0.62% and the S&P 500's gain of 4.28%.

The upcoming earnings release of Roku will be of great interest to investors. The company is predicted to post an EPS of $0.61, indicating a 771.43% growth compared to the equivalent quarter last year. Alongside, our most recent consensus estimate is anticipating revenue of $1.3 billion, indicating a 16.98% upward movement from the same quarter last year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $2.41 per share and revenue of $5.55 billion, indicating changes of +308.47% and +17.23%, respectively, compared to the previous year.

Investors should also pay attention to any latest changes in analyst estimates for Roku. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0% higher within the past month. At present, Roku boasts a Zacks Rank of #3 (Hold).

Digging into valuation, Roku currently has a Forward P/E ratio of 58.35. For comparison, its industry has an average Forward P/E of 13.28, which means Roku is trading at a premium to the group.

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. Currently, this industry holds a Zacks Industry Rank of 69, positioning it in the top 29% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.

Legacy media faces a structural crisis that cannot be solved by simply greenlighting better television shows. Owning premium content means very little if a network does not control how that content physically reaches viewers. Fox Corporation NASDAQ: FOX just acknowledged this harsh reality with a $22 billion cash-and-stock deal to acquire Roku Inc. NASDAQ: ROKU.

FOX Today

$44.55 -0.38 (-0.85%)

As of 06/23/2026 04:00 PM Eastern

52-Week Range$44.17▼

$68.18Dividend Yield1.26%

P/E Ratio11.75

Price Target$75.00

The headline numbers are aggressive, and the immediate market reaction reflects anxiety over the immense financial leverage required to close this deal. Look past the initial shock, though, and a clear survival strategy emerges. By taking ownership of the dominant connected-TV operating system, Fox Corporation transforms from a vulnerable content supplier into a powerful toll-collecting gatekeeper.

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Traditional broadcasters have spent the last decade suffering from margin compression as cable subscriptions have dwindled and affiliate fees have dried up. Transitioning to streaming was supposed to be a life raft, but networks quickly found themselves paying massive distribution cuts to third-party hardware providers just to access viewers. This acquisition signals capitulation to a new industry rule. Content alone cannot survive without distribution control.

Swallowing the Debt to Secure the FutureThe financial architecture of this acquisition requires Fox Corporation to stretch its balance sheet to the absolute limit. The company is executing the buyout at $160 per share, using a 60/40 cash-and-stock split, with $96 in cash and 0.9693 shares of Fox Class A NASDAQ: FOXA common stock per Roku share. To fund the enterprise value, Fox Corporation is securing up to $12 billion in bridge financing and absorbing $8.3 billion in new debt.

When Fox, with a $23 billion market capitalization, purchases a target valued at $22 billion, FOX shareholders are forced to absorb significant equity dilution. The market reaction was swift and punishing. Fox Corporation shares collapsed 17% on heavy volume following the announcement. Institutional investors immediately repriced Fox to account for a post-deal net leverage ratio of 2.8x trailing 12-month EBITDA.

Fox Corporation (FOX) Price Chart for Wednesday, June, 24, 2026

Valuation friction also plays a major role in the sell-off. Fox trades as a mature value play with a price-to-earnings ratio of 14, while Roku trades purely on growth metrics with a towering price-to-earnings ratio of 105. Fusing a legacy cash-flow generator with a high-multiple growth asset creates a complex valuation model that institutional bases often reject in the short term.

Corporate insiders at Roku clearly anticipated this valuation ceiling. Key executives executed a concentrated wave of share liquidations just before the merger announcement. CEO Anthony Wood sold 18,000 shares on June 12, 2026, followed by significant sales from Director Mai Fyfield on June 13, 2026. The strategic timing indicates Roku executives aggressively locked in peak valuations before the cash-and-stock conversion was finalized.

Despite the near-term pain for Fox Corporation shareholders, the debt load is a highly calculated capital expenditure. Management projects $400 million in run-rate cost savings and models the transaction to be accretive to free cash flow per share by the second full year following the anticipated 2027 close. Paying a premium to secure a 100-million-household hardware ecosystem is the cost of permanently escaping the decay of linear television.

Forging the Ultimate Streaming MonopolyFox Corporation already controls Tubi, a rapidly expanding platform in the free ad-supported streaming television sector. Integrating Tubi with The Roku Channel creates an unprecedented digital advertising inventory pool. Management plans to keep the two platforms operating as separate consumer-facing applications, a smart operational move that exploits a minimal 33% audience overlap.

The true economic value is unlocked behind the screen. By merging datasets and ad-tech infrastructure, Fox Corporation captures a dominant share of the free streaming market across global endpoints. Owning the hardware layer allows Fox to weaponize the user interface. When a viewer powers on a Roku television, Fox can dictate the visual real estate. The operating system can be programmed to natively push Fox Sports, Fox News, and Tubi content before competing applications load.

This prioritization guarantees viewership for internal Fox Corporation properties and drastically reduces the customer acquisition costs that plague standalone streaming services. A unified data ecosystem also allows Fox Corporation to track consumer behavior from the moment a television turns on to the second a viewer powers down, creating a highly targeted advertising profile that commands premium ad rates.

Forcing Advertisers to Pay the TollRoku built an empire by operating as a neutral territory. Roku acted as an agnostic aggregator, routing viewers to various streaming apps while taking a standard cut of ad inventory. That neutrality ends the moment the acquisition closes.

Transitioning the living room operating system into a walled garden designed to amplify Fox Corporation's inventory completely disrupts the ad-supported streaming ecosystem. Advertisers and media agencies rely on unbiased auction environments to deploy capital efficiently. If Roku backend ad-bidding logic shifts to favor Fox Corporation network properties, ad buyers will naturally look for alternative platforms to ensure fair market pricing.

This structural shift creates massive tailwinds for independent programmatic operators. Companies operating as independent demand-side platforms and supply-side platforms offer a neutral ground for ad buying and selling. Operators like The Trade Desk NASDAQ: TTD and Magnite NASDAQ: MGNI are structurally insulated from these emerging content conflicts. As the newly consolidated Fox Corporation ecosystem raises the toll for living room access, programmatic advertising budgets will systematically migrate toward the remaining agnostic infrastructure.

The Hunt for Neutral Ad-Tech WinnersThe combined Fox Corporation and Roku entity instantly becomes the third-largest player in U.S. television by viewing share. This consolidation removes the last major independent hardware operator from the board, leaving the sector entirely controlled by legacy media and mega-cap tech conglomerates.

Wall Street analysts are rapidly updating models to reflect this reality. Several firms downgraded Roku to market perform ratings, citing capped upside at the $160 buyout price. Conversely, a select few analysts raised their price targets slightly, pricing in the remote possibility of a competing bid from a tech giant willing to absorb the termination fee to prevent Fox Corporation from controlling the living room gateway.

Holding legacy linear broadcasters that lack a dedicated distribution arm now carries immense structural risk. Successful navigation of this market requires identifying which ad-tech firms and streaming platforms can thrive when independent hardware no longer exists. Investors looking to capitalize on shifting advertising budgets may want to add independent programmatic ad-tech operators to watchlists as the connected-TV ecosystem adjusts to the newest gatekeeper.

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