Fox sells Roku stake with eye on Tubi: report

Fox was tied to earlier reports about a $500 million deal for Tubi, an ad-supported streaming service. (Tubi)

Fox has sold off its 5% stake in Roku and could reportedly be eying a Tubi acquisition using the proceeds.

According to the Wall Street Journal, Fox sold 6 million shares of Roku to Morgan Stanley late Monday night. The bank sold off the shares almost immediately before Roku stock rallied 9% on Tuesday afternoon.

“Fox was an early, pre-IPO investor in Roku. Fox has developed streaming channels on the Roku platform for many of their most popular brands. We look forward to continued partnership and to helping make their OTT strategies highly successful,” a Roku spokeswoman told the publication.

Fox is reportedly using the money it made from the Roku deal to buy a fellow ad-supported streaming company.

RELATED: NBCU, Fox circle ad-supported streaming acquisitions: report

If true, it would confirm reports from last month that Fox was in the early stages of buying Tubi in a deal that could be valued at more than $500 million.

Fox going after Tubi would fit with the recent trend of large media conglomerates buying smaller AVOD companies. Last year, Viacom (before remerging with CBS) paid $340 million for Pluto TV. Earlier this year, Comcast bought Xumo as it prepares to launch its new AVOD service, Peacock, later this year.

According to Variety, NBCU is in talks to buy Vudu, a transactional video and free streaming service owned by Walmart. The publication said that NBCU may merge Vudu with FandangoNow, its own digital video platform.