Despite the ongoing controversy surrounding its Chairman Vince McMahon, World Wrestling Entertainment (NYSE:WWE) stock managed to hit an all-time high on Friday, defying market trends and investors’ expectations. The 52-week high was recorded at $74.95, up 3.38% from the previous closing price of $72.73 per share. It’s the second time this month that WWE stock has seen such growth, reaching an intraday 52-week high of $73 on August 4th before retreating somewhat in subsequent days. [Source]
Entertainment World Wrestling is this year bucking general market patterns.
The stock of the firm has increased by more than 50% in 2022, reached a 52-week high on Monday, and is currently trading at levels not seen since the summer of 2019. In contrast, the S&P 500 has decreased by more than 20%.
The stock’s impressive gain this year coincided with the return of live wrestling events for WWE following months of Covid restrictions and the company’s increased involvement in acquisition discussions. Even when Vince McMahon, the longstanding CEO and largest shareholder of WWE, left the organisation over the summer under a cloud of scandal, the stock price rose steadily.
WWE’s stock was mostly unchanged on Monday after reaching $76.90. The corporation has a market value of about $5.6 billion.
According to industry insiders, WWE may be a target for purchase. Before the organization’s subsequent U.S. Renewal of TV rights is anticipated to be announced in mid-2023. WWE’s existing U.S. streaming agreement with Peacock, a division of NBCUniversal, expires in 2026.
WWE is a topic covered by Northcoast Research analyst John Healy, who sees the stock’s rise as a result of a convergence of favourable ratings, potential media contract chances, and takeover rumours.
Given the company’s unusual asset and ownership structure, speculation has been rife for a while and, in my opinion, will continue to do so.
He said that “two-thirds of the money is coming from locked-in partnerships” with media firms, which makes WWE largely immune to consumer trends. Healy anticipates intense competition for the “Raw” and “Smackdown” licences, which will be renegotiated in the upcoming year, given the heavily saturated television market.
WWE has also had to handle the scandals surrounding McMahon. After it came to light that he had spent roughly $20 million in previously unreported costs, he announced his retirement in July.
Almost $15 million of the payments went toward resolving sexual misconduct claims brought against McMahon by four women over the course of 16 years, while $5 million in donations from 2007 and 2009 went to Donald Trump’s charity.
WWE has made hints that other organisations are looking into the hush money payments to alleged victims, which are currently the focus of an ongoing independent study managed by the company’s board.
WWE kept inside the family, though. The company’s former president Nick Khan and Stephanie McMahon, who is McMahon’s daughter, are now co-CEOs. Paul “Triple H” Levesque, Stephanie’s longtime wrestler husband, has succeeded the older McMahon in his position as the company’s senior creative supervisor.
With around 32% of the company’s shares, Vince McMahon, 77, continues to be the biggest shareholder.