Topline
Shares of Worldwide Wrestling Entertainment surged and then slipped Wednesday as unsubstantiated rumors of its sale to the Saudi Arabian sovereign wealth fund swirled and were later swatted down, though WWE’s market capitalization remains up nearly $2 billion since the recent return of its scandal-ridden billionaire former boss Vince McMahon.
Vince McMahon officially returned to the WWE’s board Tuesday.
Key Facts
Shares surged as much as 2.5% in early trading after a viral, now-deleted report from DAZN’s Steven Muehlhausen said WWE had entered an agreement to sell itself to the Saudi Public Investment Fund and go private, though later reports, citing internal sources at WWE, indicated that there was no sale agreement in place.
The reports are “100% false,” said LightShed Partners’ Rich Greenfield on Twitter, while Cannonball Research’s Vasily Karasyov noted in an email the original tweet was deleted and wrote in a recent note that the WWE would need to complete media rights negotiations in order for a sale to “make sense” for any bidder, with its television deal set to expire next year.
WWE stock pared gains in choppy morning trading, but shares are still up 23% since McMahon announced last Thursday he planned to return as executive chairman of the WWE’s board after spending seven months away from the company amid a sexual misconduct scandal.
“McMahon had been an integral part of every aspect of the business,” according to Loop Capital’s Alan Gould, noting it would be “highly logical to run a parallel path of a sale process and a US media rights licensing process” likely beginning in April, particularly since the value of sports and live entertainment rights across the industry are at an all-time high.
The analyst named several companies far more content-oriented than the Saudi Public Investment Fund—Comcast, Amazon, Netflix, Disney, Fox Corporation and UFC parent Endeavor—as the most likely WWE buyers.
Gould upped WWE’s price target from $90 to $105 on Friday on the sale optimism, while Citigroup raised its target for the stock from $86 to $110 on Tuesday each indicating 15% upside or more.
Key Background
WWE said last week it planned to “undertake a review of its strategic alternatives with the goal being to maximize value for all WWE shareholders,” indicating it was likely mulling a sale, and CNBC reported Saturday the firm has retained JPMorgan Chase to advise on such a transaction. WWE and the Public Investment Fund did not respond to Forbes’ request for comment. The long-time WWE CEO and chairman McMahon resigned from the company in June and retired from the company in July following the revelation of millions of dollars in company funds going toward “hush” payments to former employees accusing him of sexual misconduct. McMahon officially took over as chairman late Tuesday, while his daughter Stephanie McMahon simultaneously resigned from her role as co-CEO and chairwoman in what the elder McMahon described as a “personal decision.” The Saudi Arabian sovereign wealth fund made waves in American sports in 2022, dishing out billions of dollars in its financing of LIV Golf, the controversial PGA Tour competitor that lured top American golfers like Phil Mickelson and Bryson DeChambeau with its nine-figure paydays.
Forbes Valuation
We estimate McMahon to be worth $2.9 billion, with his fortune up substantially from the $2.3 billion it stood at as of his June resignation.
Further Reading
Vince McMahon Retires From WWE Under Cloud Of Misconduct Probe (Forbes)
Vince McMahon’s WWE Sale Would Body Slam UFC (Sportico)
Source: https://www.forbes.com/sites/dereksaul/2023/01/11/wwe-shares-are-up-23-since-vince-mcmahons-return-despite-slide-following-saudi-sale-rumors/