Roku (ROKU) Announces Acquisition by Fox Corp for $96 Cash and Shares

Roku (ROKU) Announces Acquisition by Fox Corp for $96 Cash and Shares

Tue, August 25, 2026 at 8:41 PM GMT+3 3 min read

• ROKU +0.37%

RGA Investment Advisors, an investment management company, has released its second-quarter 2026 investor letter. The letter can be downloaded here. The letter addresses the incorporation of AI into investment strategies and the dramatic changes in market dynamics that have emerged, specifically referencing the AI Bottleneck 40. This group of stocks is crucial to data center infrastructure. Initially, these stocks were closely aligned with the S&P, but by mid-2025, they began to diverge and outperform the index, exhibiting significant volatility, with realized volatility rates approaching 60%. The letter stresses the importance of continually monitoring these trends and adjusting the investment strategy. Also, check the fund's top five holdings to see its best picks in 2026.

In its Q2 2026 investor letter, RGA Investment Advisors highlighted Roku, Inc. (NASDAQ:ROKU). Headquartered in San Jose, California, Roku, Inc. (NASDAQ:ROKU) is a TV streaming platform. On August 24, 2026, Roku, Inc. (NASDAQ:ROKU) closed at $158.18 per share, reflecting a market capitalization of $23.48 billion. Roku, Inc. (NASDAQ:ROKU) posted a one‑month return of 9.92%, while its shares gained 65.53% over the past 52 weeks.

RGA Investment Advisors stated the following regarding Roku, Inc. (NASDAQ:ROKU) in its Q2 2026 investor letter:

"On June 15th, Roku, Inc. (NASDAQ:ROKU) announced that it would be acquired by Fox Corp (FOXA). We first bought shares in Roku in late 2018 and what a wild ride it has been. We sold shares several times along the way and bought meaningfully more when the remaining position almost fully round-tripped to our basis. Had you told us the outcome ex ante in 2018, we would have been excited. Yet it all feels bittersweet, with solid overall returns accompanied by a half-dozen impactful lessons that continue to shape how we approach underwriting stocks, portfolio management and the tax consequences of selling.

As with many companies and investors, COVID led to some behavioral changes that were costly. Roku was distinctly on the right track toward correcting those errors by right-sizing the cost structure, building a robust strategy to drive ARPU and commencing a share repurchase program to capitalize on a cheap stock and healthy balance sheet. We applaud Roku's execution following their course correction.

In the end, each share of Roku will receive $96 of cash and 0.9693 shares of FOXA. We are likely to hold the FOXA shares upon closing of this transaction, given our enthusiasm around the acceleration in growth at Roku itself and the revenue synergies between the two assets."

Roku, Inc. (NASDAQ:ROKU) is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 79 hedge fund portfolios held Roku, Inc. (NASDAQ:ROKU) at the end of the second quarter, which was 68 in the previous quarter. While we acknowledge the potential of Roku, Inc. (NASDAQ:ROKU) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Roku, Inc. (NASDAQ:ROKU) and shared the list of stocks that beat expectations. In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.