WWE inventory hits 52-week excessive in Vince McMahon scandal aftermath

World Wrestling Leisure is defying broader market developments this yr.

The corporate’s inventory is up greater than 50% in 2022, hitting a 52-week excessive Monday, and buying and selling at ranges it hasn’t seen since summer time 2019. The S&P 500, by comparability, is down greater than 20% this yr.

The inventory’s sturdy efficiency this yr occurred as WWE’s dwell wrestling occasions enterprise got here roaring again after months of Covid restrictions and the corporate more and more grew to become the topic of sale talks. The inventory continued to do properly after WWE’s longtime chief and largest shareholder, Vince McMahon, retired from the corporate over the summer time in a cloud of scandal.

Shares of WWE have been successfully flat Monday after hitting $76.90. The corporate’s market capitalization is greater than $5.6 billion.

Business insiders imagine WWE could possibly be an acquisition goal. A deal might come earlier than the corporate’s subsequent U.S. TV rights renewal — more likely to be introduced in mid-2023. WWE’s present U.S. streaming take care of NBCUniversal’s Peacock expires in 2026.

Analyst John Healy of Northcoast Analysis, who covers WWE, sees the inventory’s success as a confluence of profitable scores, upcoming media deal alternatives and the hypothesis a few doable acquisition.

“That hypothesis has been occurring for a very long time, and I believe will all the time be round this firm given the distinctive asset that it’s and the possession construction,” Healy instructed CNBC on Monday.

He additionally famous that WWE is comparatively insulated from shopper developments, saying that “two-thirds of the income is coming from locked-in relationships” with media firms. Given a extremely saturated media market, Healy expects excessive bidding for the rights to “Uncooked” and “Smackdown,” that are set to be renegotiated within the coming yr.

WWE has additionally needed to take care of McMahon’s controversies. He retired in July after it was revealed that he had paid almost $20 million in beforehand unrecorded bills.

Of these funds, virtually $15 million went to settle sexual misconduct allegations from 4 ladies in opposition to McMahon over the past 16 years, and $5 million went to Donald Trump’s basis from donations made in 2007 and 2009.

WWE has hinted that the hush cash funds to alleged victims, already the topic of an ongoing impartial evaluate overseen by the corporate’s board, are beneath investigation by different entities.

Nonetheless, WWE stayed within the household. Stephanie McMahon, McMahon’s daughter, took over as chairwoman and co-CEO alongside Nick Khan, the corporate’s former president. Stephanie’s husband and longtime wrestler Paul “Triple H” Levesque has taken over as the corporate’s prime inventive govt, the position the elder McMahon had earlier than he retired.

Vince McMahon, 77, stays the most important stakeholder within the firm, holding about 32% of shares.

Disclosure: Comcast owns NBCUniversal, the father or mother firm of CNBC.

– CNBC’s Chris Hayes contributed to this report.

Correction: This story was up to date to appropriately characterize Nick Khan’s position in WWE.