Over the years, we’ve seen a lot of memorable beatings as part of World Wrestling Entertainment (NASDAQ:WWE). Today, though, the larger body of WWE took a beating itself, with the stock plummeting nearly 12% in the closing minutes of Thursday’s trading session. This is the second day of losses for the WWE after word emerged that a sovereign wealth fund in Saudi Arabia was poised to take a stake in the Professional Fighters League, a league that competes with the UFC.
It was a good time for the Saudis to step in, as the PFL will go live in the region starting sometime next year. The fund in question, SRJ Sports, will drop $100 million into the PFL, which should get it set up to potentially take on the WWE itself.
That brought out Peter Supino with Wolfe Research to note that there may be room at the table for everyone here, but the PFL’s new windfall will certainly mean higher labor costs for the WWE, whose membership might end up getting poached. Recent roster moves within the WWE itself, meanwhile, have proven somewhat divisive among WWE fans, which isn’t much of a surprise. That could hurt the WWE going forward, but more likely than not, on a limited basis. Even the Saudi backing won’t totally cripple the WWE; it already has a 10-year agreement with the Saudi General Sports Authority to ensure two events in the country every year.
Analysts are all in, however. There may not be many analysts covering the WWE, but they’re all carrying Buy recommendations, which makes World Wrestling Entertainment stock a Strong Buy. Further, with an average price target of $126.25, World Wrestling Entertainment stock boasts 30.14% upside potential.
