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Why Roku Inc Stock Popped Monday

What happened

Shares of Roku (NASDAQ: ROKU) surged higher on Monday, rising as much as 15.2%. The stock is up 10.3% at the time of this writing.

While the stock's rise follows a bullish trend in the wake of Roku's better-than-expected third-quarter earnings report last week, suggesting the move could reflect extended enthusiasm about the quarter, two press releases from Roku on Monday probably helped, too:

  1. In a partnership with AT&T's DIRECTV, Roku said it has a Black Friday deal in which it is offering one month free of AT&T's DIRECTV Now with the purchase of any new Roku device. In addition, Roku said it will also be offering a "deep holiday discount" on its new Roku Streaming Stick for Black Friday weekend. The streaming stick will sell for $49.99 instead of $69.99.
  2. Roku announced Funai Electric will begin shipping Roku OS-enabled smart TVs under the company's Philips brand.

Image source: Roku.

So what

Both announcements reflect management's emphasis to get its Roku platform into the hands of as many customers as possible, even if it means its hardware segment's profitability suffers.

Now what

Roku's strategy is to make as much money as possible from the Roku platform, or revenue from monetizing content on the Roku OS. As Roku offers deep discounts and works with new TV manufacturers to get its OS on more hardware, Roku's platform growth story can continue.

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Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.